Hiraguchi, Ryoji; Shibata, Akihisa - In: Journal of Economic Dynamics and Control 52 (2015) C, pp. 258-269
We investigate an overlapping generations (OLG) model in which agents who live for two periods receive idiosyncratic productivity shocks when they are old. We show that, around zero tax equilibria, we can always construct a combination of a small capital tax and a lump-sum transfer that are...