Mikhail Golosov, University of Chicago

A Beckerian Theory of Taxation

Abstract

We study tax incidence, tax efficiency, and optimal taxation in bilateral matching environments in the spirit of Becker (1974). Both the distribution of matches and the sharing of surplus in the matches in such environments are endogenous and depend on taxes. Even simple tax reforms lead to complex chain reactions as agents adjust their matching behavior and surplus sharing to the new equilibrium. We show that to characterize the effects of taxation one needs to solve a certain system of integral equations, and develop novel analytical techniques to solve this system in general settings. Using our approach, we show how one can both characterize taxes that maximize a given social objective and to test if existing taxes are Pareto efficient. We apply our techniques to study income taxation of married couples.

Mikhail Golosov is a professor of economics at the University of Chicago.

Dr. Golosov has also held positions at Princeton University, Yale University and the Massachussetts Institute of Technology. He is currently co-editor of the American Economic Review. Dr. Golosov was awarded the Sloan Research Fellowship as well as the National Science Foundation CAREER Grant. His is a fellow of the Econometric Society and a distinguished CESifo affiliate. His research covers topics in macroeconomics, public finance and political economy.

Professor Golosov's research interests include macroeconomics; public finance; and political economy.

You can read more about Michael Golosov here

CEBI contact: Claus Thustrup Kreiner