To minimize deadweight losses, tax rates should vary unpredictably so agents cannot rearrange their work and consumption habits. As a result, optimally set tax rates will be a nonstationary time series or, put differently, changes in the tax rate will be unpredictable. This paper identifies...

We investigate the extent to which the intensity of political competition moderates the governance issues that arise in relation to Canada’s fiscal structure. By fiscal structure we mean three distinct but interrelated fiscal dimensions of the state: financial stability, long run size and...