Aghion, Philippe; Akcigit, Ufuk; Fernandez-Villaverde, Jesus - Department of Economics, University of Pennsylvania - 2013
Chamley (1986) and Judd (1985) showed that, in a standard neoclassical growth model with capital accumulation and infinitely lived agents, either taxing or subsidizing capital cannot be optimal in the steady state. In this paper, we introduce innovation-led growth into the Chamley-Judd...