TY  - JOUR
AU  - Grossman,Gene M.
AU  - Helpman,Elhanan
TI  - Intergenerational Redistribution with Short-Lived Governments
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5447
PY  - 1996
Y2  - January 1996
UR  - http://www.nber.org/papers/w5447
L1  - http://www.nber.org/papers/w5447.pdf
N1  - Author contact info:
Gene M. Grossman
International Economics Section
Department of Economics
Princeton University
Princeton, NJ 08544
Tel: 609/258-4823
Fax: 609/258-1374
E-Mail: grossman@princeton.edu

Elhanan Helpman
Department of Economics
Harvard University
1875 Cambridge Street
Cambridge, MA 02138
Tel: 617-495-4690
Fax: 617-495-7730
E-Mail: ehelpman@harvard.edu
AB  - We study the politics of intergenerational redistribution in an overlapping generations model with short-lived governments.  The successive governmentsþwho care about the welfare of the currently living generations and possibly about campaign contributionsþare unable to pre-commit the future course of redistributive taxation.  In a stationary politico-economic equilibrium, the tax rate in each period depends on the current value of the state variable and all expectations about future political outcomes are fulfilled.  We find that there exist multiple stationary equilibria in many political settings.  Steady-state welfare is often lower than it would be in the absence of redistributive politics.
ER  -