Borissov, Kirill and Surkov, Alexander (2010): Endogenous growth in a model with heterogeneous agents and voting on public goods.
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We consider a Barro-type endogenous growth model in which the government’s purchases of goods and services enter into the production function. The provision of government services is financed by flat-rate (linear) income or lump-sum taxes. It is assumed that individuals differing in their discount factors vote on the tax rates. We propose a concept of voting equilibrium leading to some versions of the median voter theorem for steady-state equilibria, fully characterize steady-state equilibria and show that if the median voter discount factor is sufficiently low, the long-run rate of growth in the case of flat-rate income taxation is higher than that in the case of lump-sum taxation.
|Item Type:||MPRA Paper|
|Original Title:||Endogenous growth in a model with heterogeneous agents and voting on public goods|
|Keywords:||economic growth, voting, proportional, flat-rate, linear tax, lump-sum tax, heterogeneous agents, endogenous growth|
|Subjects:||E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E62 - Fiscal Policy
H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H21 - Efficiency; Optimal Taxation
H - Public Economics > H3 - Fiscal Policies and Behavior of Economic Agents > H31 - Household
H - Public Economics > H4 - Publicly Provided Goods > H41 - Public Goods
D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving
D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
O - Economic Development, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity
|Depositing User:||Alexander Surkov|
|Date Deposited:||20. Dec 2010 02:21|
|Last Modified:||01. Mar 2013 21:44|
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