Hagedorn, Marcus - Institut für Schweizerisches Bankwesen <Zürich> - 2007
This paper asks whether tax cycles can represent the optimal policy in a model without any extrinsic uncertainty. I … expenditures are, the larger the class of preferences forwhich cycles are optimal becomes. Tax cycles are also more likely to be … two tax rates are needed to implement the Ramsey policy both in the Lucas-Stokey economy and in the model with frictions. …