Ravenna, Federico; Walsh, Carl E. - 2009
policymaker can always replicate the firstbestallocation;thus
we are not solving a constrained optimal taxation problem. We will … extensive
margins. We then consider the extent to which monetary policy can mimic this optimal
tax policy. This allows us to … investigate
the tax policy replicating the first best. Erceg, Henderson and Levin (2000) and Levin,
Onatski, Williams and Williams …