
doi: 10.1007/bf01588965
This paper presents an algorithm for computing approximations to a certain subset of Pareto optimal allocations in a public goods economy. Consumers are partitioned into a number of exogenous governmental jurisdictions, which provide public goods locally and raise revenue to cover their costs by means of a proportional wealth tax. The Pareto optimal allocations studied are consistent with profit maximization on the part of producers, and utility maximization over private goods bundles subject to after-tax budget constraints by consumers. The computational routine is based on the Scarf algorithm for computing fixed points.
Trade models, Fixed-point theorems, General equilibrium theory
Trade models, Fixed-point theorems, General equilibrium theory
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