Optimal public policy with endogenous mortality

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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.

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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]