Financing Public Capital When Rents Are Back: A Macroeconomic Henry George Theorem - 10.1628/fa-2018-0011 - Mohr Siebeck
Wirtschaftswissenschaft

Linus Mattauch, Jan Siegmeier, Ottmar Edenhofer, Felix Creutzig

Financing Public Capital When Rents Are Back: A Macroeconomic Henry George Theorem

Rubrik: Articles
FinanzArchiv (FA)

Jahrgang 74 () / Heft 3, S. 340-360 (21)

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By taxing rents, governments can avoid a trade-off between productivity-enhancing public investment and efficiency losses from raising funds. However, it is unclear whether the rents present in a growing economy are sufficient to finance the socially optimal investment. We prove that the social optimum can be attained if the income share from a fixed factor, such as land, exceeds the public investment requirement. We thus translate the Henry George Theorem from urban economics to neoclassical and endogenous growth settings: here, the socially optimal land rent tax rate is below 100 %. Our finding may address the underfunding of national infrastructure investments.
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Linus Mattauch Keine aktuellen Daten verfügbar.

Jan Siegmeier Keine aktuellen Daten verfügbar.

Ottmar Edenhofer Keine aktuellen Daten verfügbar.

Felix Creutzig Keine aktuellen Daten verfügbar.