Political Influence, Economic Interests and Endogenous Tax Structure in a Computable Equilibrium Framework: With Application to the United States, 1973 and 1983.

Abstract

We consider the properties of a computable equilibrium model of a competitive political economy in which the economic interests of groups of voters and their effective influence on equilibrium policy outcomes can be explicitly distinguished and computed. The model incorporates an amended version of the GEMTAP tax model, calibrated to data for the United States for 1973 and 1983. Emphasis is placed on how the aggregation of GEMTAP households into homogeneous groups affects the numerical representation of interests and influence for representative members of each group. Copyright 2001 by Kluwer Academic Publishers