Optimal public policy with endogenous mortality
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Date
Authors
Ziramba, Emmanuel
Journal Title
Journal ISSN
Volume Title
Publisher
University of Pretoria, Department of Economics
Abstract
Using a monetary pure-exchange overlapping generations model, where the probability of survival of the young agents depends upon share of government expenditure on health, education and infrastructure, we analyze the welfare-maximizing policy mix between explicit and implicit
taxation. We show that increases in the survival probability lead to an increase in the reliance on
seigniorage as a welfare maximizing outcome. However, for our results to hold, the seigniorage
tax base must be large enough for the benevolent planner to use the inflation tax.
Description
Keywords
Monetary pure exchange overlapping generations model, Probability of survival, Welfare maximizing policy mix
Sustainable Development Goals
Citation
Gupta, R & Ziramba, E 2008, 'Optimal public policy with endogenous mortality', University of Pretoria, Department of Economics, Working paper series, no. 2008-29. [http://web.up.ac.za/default.asp?ipkCategoryID=736&sub=1&parentid=677&subid=729&ipklookid=3]