Economics, Econometrics and Finance
4 years ago

Taxing bequests could lead to optimal economic growth, study finds

Fiscal policy in an overlapping generations model with bequest-as-consumption
Philippe Michel, Pierre Pestieau

Paper Summary

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The article examines how saving for future consumption and bequests affect economic growth in a model with overlapping generations. It explores how different taxes and transfers can optimize the economy, leading to either a first-best or second-best outcome. The results are compared to a standard model without intergenerational transfers.