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Political Economy of Ramsey Taxation / Daron Acemoglu, Mikhail Golosov, Aleh Tsyvinski.

NBER Working papers Available online

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Format:
Book
Author/Creator:
Acemoglu, Daron.
Contributor:
National Bureau of Economic Research.
Golosov, Mikhail.
Tsyvinski, Aleh.
Series:
Working Paper Series (National Bureau of Economic Research) no. w15302.
NBER working paper series no. w15302
Language:
English
Physical Description:
1 online resource: illustrations (black and white);
Place of Publication:
Cambridge, Mass. National Bureau of Economic Research 2009.
Summary:
We study the dynamic taxation of capital and labor in the Ramsey model under the assumption that taxes and public good provision are decided by a self-interested politician who cannot commit to policies. We show that, as long as the discount factor of the politician is equal to or greater than that of the citizens, the Chamley-Judd result of zero long-run taxes holds. In contrast, if the politician is less patient than the citizens, the best (subgame perfect) equilibrium from the viewpoint of the citizens involves long-run capital taxation.
Notes:
Print version record
August 2009.

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