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Fiscal Policy in a Growth Model with Both Altruistic and Non Altruistic Agents

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  • MICHEL, Philippe

    (IUF, LEQAM and GREQAM University of Aix-Marseille II)

  • PESTIEAU , Pierre

    (CORE, Universite catholique de Louvain and Universite de Liege and Paris X.)

Abstract

This paper examines the long-run behavior of an overlapping-generations model with a population consisting of altruistic and non-altruistic agents. It also studies the effect of fiscal policy on aggregate capital accumulation and on the welfare of both types of agents. It shows that an increase in the relative number of non-altruists is Pareto-improving in the steady-state. It also shows that the introduction of public debt or unfunded social security has no effect on the long-run equilibrium but implies a transfer of resources from the non-altruistic to the altruistic agents. Finally, it indicates that inheritance taxation hurts not only the altruists but also the nonaltruists.

Suggested Citation

  • MICHEL, Philippe & PESTIEAU , Pierre, 1994. "Fiscal Policy in a Growth Model with Both Altruistic and Non Altruistic Agents," LIDAM Discussion Papers CORE 1994049, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:1994049
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    Cited by:

    1. Kirill Borissov & Stefano Bosi & Thai Ha-Huy & Mikhail Pakhnin, 2023. "Heterogeneous Bequests and Social Inequalities," CESifo Working Paper Series 10717, CESifo.
    2. Vidal, Jean-Pierre, 2000. "Capital Mobility in a Dynastic Framework," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 606-625, July.
    3. Lambrecht, Stephane & Michel, Philippe & Vidal, Jean-Pierre, 2005. "Public pensions and growth," European Economic Review, Elsevier, vol. 49(5), pages 1261-1281, July.
    4. MICHEL, Philippe & PESTIEAU, Pierre, 2002. "Fiscal policy with agents differing in altruism and in ability," LIDAM Discussion Papers CORE 2002049, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    5. Cardia, Emanuela & Michel, Philippe, 2004. "Altruism, intergenerational transfers of time and bequests," Journal of Economic Dynamics and Control, Elsevier, vol. 28(8), pages 1681-1701, June.
    6. Jordi Caballé & Luisa Fuster, 2000. "Pay-as-you-go social security and the distribution of bequests," Economics Working Papers 468, Department of Economics and Business, Universitat Pompeu Fabra.
    7. MICHEL, Philippe & PESTIEAU, Pierre, 1998. "Fiscal policy when individuals differ regarding to altruism and labor supply," LIDAM Discussion Papers CORE 1998040, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    8. Gevers, Louis & Michel, Philippe, 1998. "Economic Dynasties with Intermissions," Games and Economic Behavior, Elsevier, vol. 25(2), pages 251-271, November.
    9. Emanuela Cardia & Serena Ng, 1997. "How Important are Intergenerational Transfers of Time? A Macroeconomic Analysis," Boston College Working Papers in Economics 395, Boston College Department of Economics.
    10. Yang, Fang, 2013. "Social security reform with impure intergenerational altruism," Journal of Economic Dynamics and Control, Elsevier, vol. 37(1), pages 52-67.
    11. Nourry, Carine & Venditti, Alain, 2001. "Determinacy of Equilibrium in an Overlapping Generations Model with Heterogeneous Agents," Journal of Economic Theory, Elsevier, vol. 96(1-2), pages 230-255, January.
    12. Kirill Borissov & Stéphane Lambrecht, 2009. "Growth and distribution in an AK-model with endogenous impatience," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 39(1), pages 93-112, April.
    13. Emmanuel Thibault, 2008. "Dynamic efficiency and intergenerational altruism," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(3), pages 679-687, July.
    14. Helmuth Cremer & ) & Pierre Pestieau, 2003. "Wealth Transfer Taxation: A Survey," Public Economics 0311003, University Library of Munich, Germany.
    15. MICHEL, Philippe & PESTIEAU, Pierre, 2001. "Fiscal policy in a growth model with bequest-as-consumption," LIDAM Discussion Papers CORE 2001009, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    16. Stéphane Lambrecht & Philippe Michel & Emmanuel Thibault, 2006. "Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(3), pages 465-486, August.
    17. Vidal, J.-P., 1999. "Capital Mobility in a Dynastic Framework," G.R.E.Q.A.M. 99a21, Universite Aix-Marseille III.
    18. Laitner, John, 2001. "Secular Changes in Wealth Inequality and Inheritance," Economic Journal, Royal Economic Society, vol. 111(474), pages 691-721, October.
    19. Borissov, Kirill, 2002. "Indeterminate steady-state equilibria in a one-sector model," Economics Letters, Elsevier, vol. 77(1), pages 125-130, September.
    20. Lines, Marji, 2001. "The dynamics of capital accumulation in an overlapping generations model," Structural Change and Economic Dynamics, Elsevier, vol. 12(1), pages 75-89, March.

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