Publication detailsReinhorn, L. (2013). Production efficiency and excess supply. Mathematical Social Sciences 65(2): 92-100.
- Publication type: Journal Article
- ISSN/ISBN: 0165-4896
- DOI: 10.1016/j.mathsocsci.2012.09.002
- Further publication details on publisher web site
- Durham Research Online (DRO) - may include full text
Author(s) from Durham
This paper demonstrates that intermediate goods should not be taxed even in the presence of dividend payments to households. We also find that optimal government policy in a second best world may include stockpiles of output—private supply exceeds private demand, and the government purchases the surplus. This may provide a possible explanation for some agricultural policies.