Optimal public policy with endogenous mortality
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Date
Authors
Gupta, Rangan
Ziramba, Emmanuel
Journal Title
Journal ISSN
Volume Title
Publisher
Taylor & Francis
Abstract
We analyze the welfare-maximizing policy mix between explicit and implicit taxation, where the probability of survival of the young agents depends upon the share of government expenditure on health, education and infrastructure. We show that increases in the survival probability lead to an increase in the reliance on seigniorage as a welfare maximizing outcome. However, the seigniorage tax base must be large enough for the benevolent planner to use the inflation tax.
Description
Keywords
Monetary exchange overlapping generations model, Probability of survival, Welfare maximizing policy mix
Sustainable Development Goals
Citation
Gupta, R & Ziramba, E 2010, 'Optimal public policy with endogenous mortality', Journal of Economic Policy Reform, vol. 13, no. 3, pp. 241-249. [http://www.tandf.co.uk/journals/titles/13841289.asp]