TY - JOUR
T1 - Government intervention as a bequest substitute
AU - Strawczynski, Michael
PY - 1994/3
Y1 - 1994/3
N2 - A subsequent generations model is used in order to characterize consumption allocation under the future generation's income uncertainty. Altruistic concerns towards future generations give rise to 'precautionary bequests' which act as a hedge on risk. It is shown that given a first-order correlation between mean future income and the present generation's income, government can provide a Pareto improvement through a tax-transfer policy with universal participation. This policy acts as a substitute for precautionary bequests. Distributional aspects of government tax-transfer policy are also discussed.
AB - A subsequent generations model is used in order to characterize consumption allocation under the future generation's income uncertainty. Altruistic concerns towards future generations give rise to 'precautionary bequests' which act as a hedge on risk. It is shown that given a first-order correlation between mean future income and the present generation's income, government can provide a Pareto improvement through a tax-transfer policy with universal participation. This policy acts as a substitute for precautionary bequests. Distributional aspects of government tax-transfer policy are also discussed.
UR - https://www.scopus.com/pages/publications/38149146258
U2 - 10.1016/0047-2727(94)90036-1
DO - 10.1016/0047-2727(94)90036-1
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AN - SCOPUS:38149146258
SN - 0047-2727
VL - 53
SP - 477
EP - 495
JO - Journal of Public Economics
JF - Journal of Public Economics
IS - 3
ER -