CEF.UP – ECO Seminar/Webinar

Tuesday – December 5^th, 2023, at 1:00 p.m. | Room 305| Online

“Optimal income redistribution”

Pavel Brendler  –  Bonn University

Abstract:

“What is the optimal income tax and Social Security policy?  We set up a rich quantitative model in which a Ramsey planner jointly chooses both programs by maximizing the welfare of currently alive and future generations. We find that the extent to which the government is willing to provide insurance through the income tax-and-transfer program vis-a-vis the pension system crucially depends on the weight the planner assigns to future generations as well as the persistence of wealth transmission across generations. Depending on the intergenerational weight, some of the joint reforms deliver Pareto improvements across generations (but not within generations).”