Electronic Resource
[S.l.]
:
Emerald
Journal of economic studies
22 (1995), S. 4-20
ISSN:
0144-3585
Source:
Emerald Fulltext Archive Database 1994-2005
Topics:
Economics
Notes:
Develops a general equilibrium model of the growth of governmentbased on the attempts of various socio-economic groups to redistributeincome in their own favour. In the non-cooperative equilibrium of ourmodel under free political competition, every group in the economy paystaxes at rates which maximize the net contribution of each to theirgovernment's budget. On the basis of this model, argues that the recentgrowth of government can be explained by the increased role of humancapital as a factor of production; the rise in the population share ofthe elderly; and the reductions in the relative value of non-market usesof labour caused by increased specialization and population pressure.Human capital, which has been both an important source of growth inincome and the main factor behind the expansion of the middle class,seems to be a relatively easy-to-tax asset. This finding may resolve thepuzzle of simultaneous growth of government and increase in incomeequality in developed countries that has challenged recent models ofredistributive taxation.
Type of Medium:
Electronic Resource
URL:
http://dx.doi.org/10.1108/01443589510086952
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