Tella, Rafael Di; Dubra, Juan - In: American Economic Review 103 (2013) 1, pp. 549-53
We provide an example that shows that in the Alesina and Angeletos (2005) model one can obtain multiplicity even if luck plays no role in the economy. Thus, it is not critical that the noise to signal ratio be increasing in taxes, or that desired taxes are increasing in the noise to signal ratio.