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dc.contributor.authorPiguillem, Facundo
dc.contributor.authorRiboni, Alessandro
dc.date.accessioned2011-12-05T12:22:56Z
dc.date.available2011-12-05T12:22:56Z
dc.date.issued2011-02
dc.identifier.urihttps://basepub.dauphine.fr/handle/123456789/7724
dc.language.isoenen
dc.subjectLegislaturesen
dc.subjectRedistributionen
dc.subjectCapital taxesen
dc.subjectBargainingen
dc.subjectTime Consistencyen
dc.subject.ddc338.5en
dc.subject.classificationjelD72en
dc.subject.classificationjelE62en
dc.subject.classificationjelH00en
dc.subject.classificationjelO16en
dc.titleDynamic Bargaining over Redistribution in Legislaturesen
dc.typeDocument de travail / Working paper
dc.contributor.editoruniversityotherDepartment of Economics, University of Montreal;Canada
dc.contributor.editoruniversityotherEinaudi Insitute for Economics and Finance (EIEF), Rome;Italie
dc.description.abstractenThis paper analyzes the standard Neoclassical growth model where agents are heterogeneous in their initial wealth. Wealth can be taxed in order to finance equal lump-sum transfers. We consider a representative democracy where elected officials select the current capital tax by playing a legislative bargaining game. Specifically, one member of the legislature makes a take-it-or-leave-it proposal and decisions pass by majority rule. In case of rejection of the proposal, the capital tax that was voted in the previous period (the status quo) is kept in place for one more period. A key feature of the bargaining game is that when looking at current payoff s both the agenda setter and the legislature have aligned preferences : their most preferred static policy is full taxation. However, the strength of these preferences diff er. We show that the fear of ending in a high taxation equilibrium sustains levels of capital taxes and redistribution that are empirically reasonable. The endogeneity of the status quo is a crucial ingredient which disciplines legislators and reduces commitment problems. We also find that higher wealth inequality does not necessarily increase the size of government (the share of income redistributed).en
dc.publisher.nameUniversité Paris-Dauphineen
dc.publisher.cityParisen
dc.identifier.citationpages16en
dc.description.sponsorshipprivateouien
dc.subject.ddclabelMicroéconomieen


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