In this article specific hypotheses on the shape of a rational agent’s risk preference function are derived from psychophysical laws. Weber’s law is used to establish the hypothesis of constant relative risk aversion for a myopic expected-utility maximizer. Weber’s law. Fechner’s law and...

This paper analyzes the intertemporal allocation effects of anticipated tax rate changes, reconsidering the recommendations of the Meade Committee in a perfect foresight general equilibrium model of economic growth. It is shown that the R-base (or consumption) tax can be more distortionary than...

Crisis Issue: The papers in this title have been written in response to the global financial and economic crisis that has been ongoing since Summer 2007. Top economists provide a concise and accessible evaluation of major developments in trade and trade policy. Economic Policy has earned a...

This paper counters the view that the possibility of share repurchases invalidates the predictions of the ’new’ (or ’trapped equity’) view of corporate taxation. It is shown that the ’new’ view’s basic cost of capital expression which distinguishes it from the ’old’ view...