In recent years there has been a growing controversy concerning the e¤ective role of distributional policy in economies in which agents hold altruistic preferences. We show that in order to establish cross sectional Distributional Neutrality households require information on consanguinity links prior to making their decisions on consumption and bequests. If such information is not available due...

This study tests the importance of Ricardian technology differences for international trade. The empirical analysis has three comparative advantages: including emerging and advanced economies, isolating panel variation regarding the link between productivity and exports, and exploiting heterogeneous technology diffusion from immigrant communities in the United States for identification. The lat...

In models with a representative infinitely lived household, modern versions of tax smoothing imply that the steady-state of government debt should follow a random walk. This is unlikely to be the case in OLG economies, where, the equilibrium interest rate may differ from the policy-maker’s rate of time preference such that it may be optimal to reduce debt today to reduce distortionary taxation ...