Political economy of Ramsey taxation
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 politician is as patient as 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.
Year of publication: |
2011
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Authors: | Acemoglu, Daron ; Golosov, Mikhail ; Tsyvinski, Aleh |
Published in: |
Journal of Public Economics. - Elsevier, ISSN 0047-2727. - Vol. 95.2011, 7-8, p. 467-475
|
Publisher: |
Elsevier |
Keywords: | Capital taxation Fiscal policy Political economy |
Saved in:
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