Both in theory and practice, capital controls and dual exchange rate systems can be part of a country's optimal tax policy. We first show how a dual exchange rate system can be interpreted as a tax (or subsidy) on international capital income. We show that a dual exchange rate system, with...

We construct a small open economy model with a renewable resource. Households have an endogenous time preference rate that depends on the level of the renewable resource in the domestic economy. Although households know that the degree of own patience depends on its resource, we assume that...

The standard tax theory result that investment should not be distorted is based on the assumption that profits are locally bound. In this paper we analyze the optimal tax policy when firms are internationally mobile. We show that the optimal policy response to increasing firm mobility may be...

The standard tax theory result that investment should not be distorted is based on the assumption that profits are locally bound. In this paper we analyze the optimal tax policy in a model where firms are internationally mobile. We show that the optimal policy response to increasing firm...

This paper accounts for China’s economic growth since 1980 in a unified endogenous growth model in which a sequencing of physical capital accumulation, human capital accumulation and innovation drives the rise in China’s aggregate income. The first stage is characterized by physical capital...

This paper accounts for China?s economic growth since 1980 in a uni-fied endogenous growth model in which a sequencing of physical capital accumula-tion, human capital ac-cumulation and innovation drives the rise in China?s aggre-gate income. The first stage is characterized by physical capital...

This paper accounts for China.s economic growth since 1980 in a unified endogenous growth model in which a sequencing of physical capital accumulation, human capital ac-cumulation and innovation drives the rise in China.s aggregate income. The first stage is characterized by physical capital...

In this article we propose a model in which individuals experience habit formation in environmental quality. Further, a consumption good causes a negative external effect on the environment.The intertemporal utility of a benevolent social planner depends on consumption of two goods and the...

We construct an index theorem for smooth infinite economies that shows that generically the number of equilibria is odd. As a corollary, this gives a new proof of existence and gives conditions that guarantee global uniqueness of equilibria.

In a recent article, Demichelis and Polemarchakis (2007) highlighted the role played by the frequency of trade on the degree of indeterminacy of equilibrium in economies of overlapping generations. Assuming that time has a finite starting point and extends into the infinite future, they prove...