Abstract

The paper studies the dynamic macroeconomic and welfare effects of tax policy in the context of an overlapping-generations model of the Yaari-Blanchard type for a closed economy. The model is extended to allow for endogenous labor supply and three tax instrumentsonamely, a capital tax, labor income tax, and consumption tax. It is shown that labor taxes increase welfare of old generations whereas capital and consumption taxes reduce their welfare. Copyright 2002, International Monetary Fund

Full Text
Published version (Free)

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call