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Sunspot Equilibria in a Production Economy: Do Rational Animal Spirits Cause Overproduction?
Kajii, Atsushi - Institute of Economic Research, Kyoto University - 2008
We study a standard two period economy with one nominal bond and one firm. The input of the firm is done in the first period and financed with the nominal bond, and its profits are distributed to the shareholders in the second period. We show that a sunspot equilibrium exists around each...
Persistent link: https://www.econbiz.de/10005570211
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Constrained inefficiency and optimal taxation with uninsurable risks
Gottardi, Piero; Kajii, Atsushi; Nakajima, Tomoyuki - 2014
When individuals' labor and capital income are subject to uninsurable idiosyncratic risks, should capital and labor be taxed, and if so, how? In a two-period general equilibrium model with production, we derive a decomposition formula of the welfare effects of these taxes into insurance and...
Persistent link: https://www.econbiz.de/10011310192
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Optimal taxation and debt with uninsurable risks to human capital accumulation
Gottardi, Piero; Kajii, Atsushi; Nakajima, Tomoyuki - 2014
We consider an economy where individuals face uninsurable risks to their human capital accumulation and study the problem of determining the optimal level of linear taxes on capital and labor income together with the optimal path of the debt level. We show both analytically and numerically that...
Persistent link: https://www.econbiz.de/10011310194
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Optimal taxation and constrained inefficiency in an infinite-horizon economy with incomplete markets
Gottardi, Piero; Kajii, Atsushi; Nakajima, Tomoyuki - 2011
a tractable infinite horizon model with incomplete markets. With zero public expenditure and debt, it is optimal to tax …
Persistent link: https://www.econbiz.de/10010277403
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Constrained inefficiency and optimal taxation with uninsurable risks
Gottardi, Piero; Kajii, Atsushi; Nakajima, Tomoyuki - 2014
When individuals' labor and capital income are subject to uninsurable idiosyncratic risks, should capital and labor be taxed, and if so, how? In a two-period general equilibrium model with production, we derive a decomposition formula of the welfare effects of these taxes into insurance and...
Persistent link: https://www.econbiz.de/10010433962
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Optimal taxation and debt with uninsurable risks to human capital accumulation
Gottardi, Piero; Kajii, Atsushi; Nakajima, Tomoyuki - 2014
We consider an economy where individuals face uninsurable risks to their human capital accumulation and study the problem of determining the optimal level of linear taxes on capital and labor income together with the optimal path of the debt level. We show both analytically and numerically that...
Persistent link: https://www.econbiz.de/10010433969
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Optimal taxation and constrained inefficiency in an infinite-horizon economy with incomplete markets
Gottardi, Piero; Kajii, Atsushi; Nakajima, Tomoyuki - 2011
a tractable infinite horizon model with incomplete markets. With zero public expenditure and debt, it is optimal to tax … level. -- incomplete markets ; Ramsey equilibrium ; optimal taxation ; optimal public debt ; constrained inefficiency …
Persistent link: https://www.econbiz.de/10009273122
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Risk-Free Bond Prices in Incomplete Markets with Recursive Utility Functions and Multiple Beliefs
Hara, Chiaki - 2004
We consider an exchange economy under uncertainty, in which agents' utility functions exhibit constant absolute risk … aversion, but they may be recursive and the expected utility calculation may be based on multiple subjective beliefs. The risk … differ across agents. We prove that the risk-free bond price goes down (and the interest rate goes up) monotonically as the …
Persistent link: https://www.econbiz.de/10012737939
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On the Range of the Risk-Free Interest Rate in Incomplete Markets
Hara, Chiaki - 2004
In a model of a two-period exchange economy under uncertainty, we find both upper and lower bounds for the risk free … interest rate when the agents' utility functions exhibit constant absolute risk aversion. These bounds are independent of the … risk-free rate puzzle in this class of general equilibrium models with heterogeneous agents. A general method of finding …
Persistent link: https://www.econbiz.de/10012738645
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Optimal Taxation and Debt with Uninsurable Risks to Human Capital Accumulation
Gottardi, Piero - 2015
We consider an economy where individuals face uninsurable risks to their human capital accumulation and study the problem of determining the optimal level of linear taxes on capital and labor income together with the optimal path of the debt level. We show both analytically and numerically that...
Persistent link: https://www.econbiz.de/10013026068