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Interest Rates and Backward-Bending Investment
Chetty, Raj - 2021
This paper studies the effect of interest rates on investment in an environment where firms make irreversible … delaying investment. These two forces combine to generate an aggregate investment demand curve that is always a backward …-bending function of the interest rate. At low rates, increasing the interest rate stimulates investment by raising the cost of delay …
Persistent link: https://www.econbiz.de/10013238745
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A Theory of Optimal Capital Taxation
Piketty, Thomas - 2012
This paper develops a realistic, tractable theoretical model that can be used to investigate socially-optimal capital taxation. We present a dynamic model of savings and bequests with heterogeneous random tastes for bequests to children and for wealth per se. We derive formulas for optimal tax...
Persistent link: https://www.econbiz.de/10013107763
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Capital Income Taxes with Heterogeneous Discount Rates
Diamond, Peter A. - 2010
With heterogeneity in both skills and discount factors, the Atkinson-Stiglitz theorem that savings should not be taxed does not hold. We consider a model with heterogeneity of preferences at each earnings level. With some assumptions on the equilibrium, a small savings tax on high earners and a...
Persistent link: https://www.econbiz.de/10013152380
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The Welfare Effects of a Capital Income Tax in an Open Economy
Hartman, David G. - 2021
International capital mobility has typically been ignored in discussions of the welfare effects of the capital income tax. In the a typical analysis which does consider the open economy it is recognized that highly-elastic capital flows could significantly alter the usual conclusions. While...
Persistent link: https://www.econbiz.de/10013236725
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Trading with the Unborn : A New Perspective on Capital Income Taxation
Smetters, Kent A. - 2021
Security markets between generations are incomplete due to a biological trading constraint' that prevents living generations from negotiating contingent contracts with the unborn. This paper shows, however, that government policy can be used to replicate the trades that would have occurred if...
Persistent link: https://www.econbiz.de/10013212341
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Capital Income Taxes and the Benefit of Price Stability
Feldstein, Martin S. - 2000
Going from low inflation to price stability involves a short term loss (associated with the" higher unemployment rate required to reduce the inflation) and results in a series of welfare gains" in all future years. The primary source of these gains is the reduction in the distortions that...
Persistent link: https://www.econbiz.de/10014158369
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The Deadweight Loss from `Non-Neutral' Capital Income Taxation
Auerbach, Alan J. - 2021
This paper develops an overlapping generations general equilibrium growth model with an explicit characterization of the role of capital goods in the production process. The model is rich enough in structure to evaluate and measure simultaneously the different distortions associated with capital...
Persistent link: https://www.econbiz.de/10013228635
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Fiscal Policies, Capital Formation, and Capitalism
Feldstein, Martin S. - 2011
technology of private investment. Government policies that discourage saving might make the Schumpeterian vision of a shift from …
Persistent link: https://www.econbiz.de/10013118689
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Taxes and Capital Formation : How Important is Human Capital?
Whalley, John - 2021
-human capital falls to approximately its initial net of tax level, and steady-state human capital investment plans are therefore …
Persistent link: https://www.econbiz.de/10013224952
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Taxation and the Sources of Growth : Estimates from United States Multinational Corporations
Cummins, Jason G. - 2022
Capital income tax policy affects investment by the parent and affiliates of multinational corporations (MNCs). In a … model in which technical advances are embodied in new capital, investment will translate directly into productivity gains … 1992, due to productivity growth in MNCs with Canadian affiliates; (3) the investment elasticity of productivity growth is …
Persistent link: https://www.econbiz.de/10013322112