Koskela, Erkki; Puhakka, Mikko - In: FinanzArchiv: Public Finance Analysis 62 (2006) 2, pp. 149-167
We study the effects of distortionary labor taxation on endogenous cycles and the indeterminacy of equilibria in an overlapping-generations model with a balanced-budget rule. Under proportional taxation there is a critical tax rate above which cycles vanish, while with linearly progressive...