Financing public capital when rents are back: a macroeconomic Henry George Theorem
| Autor: | Linus Mattauch, Jan Siegmeier, Ottmar Edenhofer, Felix Creutzig |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
Finance
Endogenous growth theory business.industry media_common.quotation_subject 05 social sciences Economic rent Public capital Investment (macroeconomics) Tax rate Land rent Urban economics 0502 economics and business Economics Henry George theorem 050202 agricultural economics & policy 050207 economics business media_common |
| DOI: | 10.1628/fa-2018-0011 |
| Popis: | 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. |
| Databáze: | OpenAIRE |
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