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Economic and Social Security in the Twenty‐first Century, with Attention to Europe
Author(s) -
Dreze Jacques H.
Publication year - 2000
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00204
Subject(s) - economics , ex ante , subsidy , moral hazard , social security , scope (computer science) , compromise , competition (biology) , public economics , capital (architecture) , labour economics , microeconomics , incentive , macroeconomics , market economy , political science , history , ecology , archaeology , biology , computer science , law , programming language
A partly heuristic attempt is made to explore long‐run policies aimed at a second‐best compromise between ex ante risk‐sharing efficiency and ex post productive efficiency. Wage subsidies for low‐skilled workers financed by taxes on high wages are advocated, together with improved risk sharing between capital and labour, between generations and among the countries belonging to EMU. The scope of the policies advocated is limited by considerations of moral hazard, time consistency and fiscal competition. Moreover, estimates of some key economic parameters remain very imprecise. Several avenues of further research are identified.