Comment on P.J. Hammond and A. Villar, "Efficiency with non-convexities: extending the 'Scandinavian consensus' approaches

Article Abstract:

Consensus does not imply that there is no conflicting interests among agents, but are only caused by conflicts of interest on the distribution of income or resources. The standard competitive model suggests that the equilibrium is the result of the work of a Walrasian auctioneer, who reports a price vector and modifies it until a symmetry between supply and demand in all markets is reached. The extended equilibrium model indicates the joining of an auctioneer and a social planner. A consensus is evidenced by the fact that resources are effectively assigned relative to the distribution of income between agents.

Scandinavia

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Is it legitimate to encourage work sharing?

Article Abstract:

There exists a fundamental inconsistency in the income taxation model of Mirrlees (1971). An extension of the Mirrlees model is done where individual qualifications and labor supplies are observable by the government. The different abilities of individuals affect disutility of labor and cost of training. Conditions are identified where it is optimal to subsidize lower qualifications or allow work sharing.

Job sharing, Income tax

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How does uncertainty about future fiscal policy affect current macroeconomic variables?

Article Abstract:

An analysis of fiscal policy uncertainty effects on macroeconomic variables reveals that uncertainty on future macroeconomic policies in general is a contractional force on the present. The study reveals that the different mechanisms involved include price flexibility, wage flexibility and nominal rigidity and that rational anticipation of these factors depresses current aggregate demand.

Fiscal policy, Macroeconomics

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