We study aggregate, distributional, and welfare effects of a permanent reduction in the capital tax rate in a dynamic … equilibrium model with capital-skill complementarity. Such a tax reform leads to expansionary long-run aggregate effects, but is … distortionary labor or consumption tax rates have to increase to finance the capital tax rate cut. An extension to a model with …

typically led to an expansion in redistribution, at least in the small sample of episodes studied. Similarly, and more …