Intergenerational Redistribution With Short-Lived Governments  

Oleh:

Grossman, Gene M. ; Helpman, Elhanan

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 108 no. 450 (Sep. 1998), page 1299-1329.
Fulltext: 1299.pdf (431.78KB)

Isi artikel

We study the politics of intergenerational redistribution in an overlapping generations model with short-lived governments. The successive governments who care about the welfare of the currently living generations and possibly about campaign contributionsÐare unable to precommit the future course of redistributive taxation. In a stationary politico-economic equilibrium, the intergenerational transfer in each period depends on the current value of the state variable and all expectations about future political outcomes are fulfilled. We find that there exist multiple stationary equilibria in many political settings. Steady-state welfare is often lower than it would be in the absence of redistributive politics.

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