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 …

framework with endogenous disaster risk, we allow for an endogenous determination of geopolitical risk and defense capacity …, which we discipline using the Geopolitical Risk Index. We show both analytically and quantitatively that financing defense … the presence of heightened risk involves a twice higher share of debt and backloading of tax distortions compared to other …

This paper studies Pareto-optimal risk-sharing arrangements in a private information economy with aggregate uncertainty …