Optimal Provision of Public Inputs in a Second Best Scenarioa Numerical Simulation
Verlag: [s.l: s.n.]
Datum der Publikation: 2005
Seiten: 54
Kongress: Encuentro de Economía Pública (12. 2005. Palma de Mallorca)
Art: Konferenz-Beitrag
Zusammenfassung
This paper studies the optimal provision of public inputs under two different tax settings: with lump-sum taxes and with taxes on labor. After obtaining optimal rules for the provision of public inputs, a numerical simulation is carried out to compute the level of public spending in each scenario. We find that the level of public input provided under a second best scenario is higher than that corresponding to a first best outcome, with a bigger social welfare too.