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- Title
Positional preferences and efficiency in a dynamic economy.
- Authors
Aronsson, Thomas; Ghosh, Sugata; Wendner, Ronald
- Abstract
In an endogenous growth model, we characterize the conditions under which positional preferences for consumption and wealth do not cause inefficiency and derive an optimal tax policy response in cases where these conditions are not satisfied. The concerns for relative consumption and relative wealth partly emanate from social comparisons with people in other countries. We distinguish between a (conventional) welfarist government and a non-welfarist government that does not attach any social value to relative concerns. We also compare the outcome of Nash-competition among local/national governments with the resource allocation implied by a global social optimum both under welfarism and non-welfarism.
- Subjects
SOCIAL comparison; SOCIAL values; FISCAL policy; RESOURCE allocation; FEDERAL government; ENDOGENOUS growth (Economics)
- Publication
Social Choice & Welfare, 2023, Vol 61, Issue 2, p311
- ISSN
0176-1714
- Publication type
Article
- DOI
10.1007/s00355-022-01447-x