Title: Government intervention as a bequest substitute
Abstract: Abstract 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.
Publication Year: 1994
Publication Date: 1994-03-01
Language: en
Type: article
Indexed In: ['crossref']
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Cited By Count: 9
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