We study the optimal taxation of risk-free and excess capital income with heterogeneous rates of return, alongside an … optimal nonlinear earnings tax. Households can hold three assets: one risk-free, one risky but diversifiable, and one a … private investment with idiosyncratic risk whose expected return differs among households. Contrary to expectations, the …

Justification for policies to encourage investments in education, particularly for individuals at the lower end of the … potentially loss averse around their expected outcome make risky investments in education and we draw on optimal tax theory to … explore the design of policy. The model highlights the critical roles played by (i) the relationship between behavioural risk …

demonstrated that a key feature of human capital investments is whether they increase or decrease wage risk. In a benchmark model …This paper considers how optimal education and tax policy depends on the risk properties of human capital. It is …

more attractive for social insurance if a larger part of risk is realized in the first period of the life-cycle. Our …

-household income insurance mechanism strongly biases upward the welfare losses from idiosyncratic wage risk as well as the desired …

facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the general equilibrium feedback of … optimal aggregate saving rate is independent of income risk. The optimal time-invariant tax on capital is increasing in income … risk. Its sign depends on the extent of risk and on the Pareto weight of future generations. If the Ramsey tax rate that …

in either uncertainty about the model or risk about abatement cost increases expected steady state pollution taxes; (2) a … uncertainty or higher multiplicative risk and (3) the effect on expected steady state pollution taxes and stock of introducing …