We show how experience and dynamic learning processes reduce the obstacles to optimization imposed by information …

We show how experience and dynamic learning processes reduce the obstacles to optimization imposed by information …

neighbours’ experiences. In contrast to the existing work on policy learning, we focus on learning in the presence of (fiscal …) externalities. We show that, because learning can exacerbate this external-ity, the value of learning can be negative and, thus …, learning may be too fast. Given that variance in tax policies enhances learning, this implies that, in the sequence of Markov …

observed countries. In equilibrium, tax rates are inefficiently low if the value of learning is positive and the pace of … learning increases in the level of tax rates (because higher tax rates trigger larger tax base effects which helps learning … learning). If, due to fiscal externalities, the value of learning is negative, the opposite may be true. From the viewpoint of …

the nature of the task at the second date further shows that learning is unencumbered by a change in environment. Our …

the nature of the task at the second date further shows that learning is unencumbered by a change in environment. Our …