Optimal public policy with endogenous mortality

摘要

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.View full textDownload full textKeywordsmonetary exchange overlapping generations model, probability of survival, welfare maximizing policy mixJEL ClassificationH2, H51, I1, I18Related var addthis_config = { ui_cobrand: "Taylor & Francis Online", services_compact: "citeulike,netvibes,twitter,technorati,delicious,linkedin,facebook,stumbleupon,digg,google,more", pubid: "ra-4dff56cd6bb1830b" }; Add to shortlist Link Permalink http://dx.doi.org/10.1080/17487870.2010.503085