Article ID Journal Published Year Pages File Type
986727 Review of Economic Dynamics 2006 13 Pages PDF
Abstract

We study a simple model of production, accumulation, and redistribution, where agents are heterogeneous in their initial wealth, and a sequence of redistributive tax rates is voted upon. Though the policy is infinite-dimensional, we prove that a median voter theorem holds if households have identical, Gorman aggregable preferences; furthermore, the tax policy preferred by the median voter has the “bang-bang” property.

Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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