Premium
Optimal Taxation: Merging Micro and Macro Approaches
Author(s) -
GOLOSOV MIKHAIL,
TROSHKIN MAXIM,
TSYVINSKI ALEH
Publication year - 2011
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/j.1538-4616.2011.00413.x
Subject(s) - macro , redistribution (election) , micro level , computer science , economics , public economics , risk analysis (engineering) , microeconomics , business , political science , law , programming language , economic impact analysis , politics
This paper argues that the large body of research that follows Mirrlees approach to optimal taxation has been developing in two directions, referred to as the micro and macro literatures. We review the two literatures and argue that both deliver important insights that are often complementary to each other. We argue that merging the micro and macro approaches can prove beneficial to our understanding of the nature of efficient redistribution and social insurance and can deliver implementable policy recommendations.