paper we argue that practicality is not the only feature that can be addressed by means of stochastic choice theory. This … theory also offers a powerful framework for developing a more realistic model for labor supply choices, founded on …

equilibrium model in which there is a continuum of firms subject to idiosyncratic productivity shocks. We find that a dividend tax … cut raises aggregate productivity by reducing the frictions in the reallocation of capital across firms. Our baseline …