Abstract
Economic freedom describes a particular condition in which the individual finds himself as a result of certain characteristics in his economic environment. Taking a simple formulation of decision-making in which it is assumed that the individual maximizes his satisfaction both as a consumer of private and government goods and services and as a supplier of factor services, his position may be depicted as follows:
Subject to
where xi is a vector of ‘private goods’, q k is a vector of goods supplied by government, ai is a vector of factor inputs, p c k is a vector of product prices for private goods, p a k is a vector of factor prices, T i k is net tax liability of individual (tax obligation less transfers), Yi is personal income before tax of individual and subscript k denotes an exogenously determined variable.
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© 1989 Palgrave Macmillan, a division of Macmillan Publishers Limited
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Peacock, A. (1989). Economic Freedom. In: Eatwell, J., Milgate, M., Newman, P. (eds) The Invisible Hand. The New Palgrave. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-20313-0_8
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DOI: https://doi.org/10.1007/978-1-349-20313-0_8
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