TEL  Vol.2 No.5 , December 2012
Theft and Welfare in General Equilibrium: A Theoretical Note
We show that in a dynamic general equilibrium model theft lowers social welfare even if it is costless to steal, there is no theft prevention cost, and all stolen goods are immediately returned to society. Theft lowers social welfare because it distorts the investment decision, resulting in undercapitalization and a lower steady-state level of capital. This sheds a new light on the literature originated by Tullock [1].

Cite this paper
T. Randolph Beard, G. S. Ford, L. V. Stern and M. L. Stern, "Theft and Welfare in General Equilibrium: A Theoretical Note," Theoretical Economics Letters, Vol. 2 No. 5, 2012, pp. 470-473. doi: 10.4236/tel.2012.25088.
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