SOURCE: Federal Reserve Bank of Richmond

October 01, 2009 15:51 ET

Richmond Fed's Economic Quarterly Reviews the Economic Theory of Redistributive Taxation

"Distortionary Taxation for Efficient Redistribution" by Borys Grochulski

RICHMOND, VA--(Marketwire - October 1, 2009) - General equilibrium theory -- a starting point for much economic analysis -- suggests that market allocations are efficient and that the societally preferred level of income redistribution can in principle be achieved by non-distortionary lump-sum taxes and transfers. But when governments do not possess sufficiently fine information about people's preferences, this finding does not hold. Richmond Fed economist Borys Grochulski studies the use of distortionary taxes -- taxes that alter people's incentives -- to achieve a given level of redistribution.

You can find the full text of this article and others in the latest issue of Economic Quarterly at:

Also in the Summer 2009 issue:

--  "The Behavior of Household and Business Investment over the Business
    Cycle" by Kausik Gangopadhyay and Juan Carlos Hatchondo
--  "Short-Term Headline-Core Inflation Dynamics" by Yash P. Mehra and
    Devin Reilly
--  "Why Could Political Incentives Be Different During Election Times?"
    by Leonardo Martinez

The Economic Quarterly is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For free copies or more information, contact the Federal Reserve Bank of Richmond's Public Affairs office at 804.697.7982.

The Federal Reserve Bank of Richmond is one of 12 District Reserve Banks that together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Richmond Fed serves the Fifth Federal Reserve District, which encompasses the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

Contact Information

  • Contacts:
    John Weinberg
    Director of Research
    Federal Reserve Bank of Richmond

    Amanda Kramer
    Managing Editor
    Federal Reserve Bank of Richmond Economic Quarterly
    Email Contact