Public debt and optimal taxes without commitment
نویسنده
چکیده
Benhabib and Rustichini [Optimal taxes without commitment, J. Econ. Theory 77 (1997) 231–259] study the properties of optimal capital taxes in economies without commitment and no government debt. They find that capital taxes may be different from zero at steady state. This note shows that, once governments have the possibility of issuing debt and smoothing taxes over time, optimal steady state capital taxes turn out to be zero. © 2006 Elsevier Inc. All rights reserved. JEL classification: E61; E62; H21; H63
منابع مشابه
Optimal monetary policy when lump-sum taxes are unavailable: A reconsideration of the outcomes under commitment and discretion
We re-examine optimal monetary policy when lump-sum taxes are unavailable. Under commitment, we show that, with alternative utility functions to that considered in Nicolini’s related analysis, the direction of the incentive to cheat may depend on the initial level of government debt, with low debt creating an incentive towards surprise deflation, but high debt the reverse. Under discretion, we ...
متن کاملOptimal Taxation and Debt Management without Commitment∗
This paper considers optimal fiscal policy in a deterministic Lucas and Stokey (1983) economy in the absence of government commitment. In every period, the government chooses a labor income tax and issues any unconstrained maturity structure of debt as a function of its outstanding debt portfolio. We find that the solution under commitment cannot always be sustained through the appropriate choi...
متن کاملGovernment Debt and Optimal Monetary and Fiscal Policy
How do di¤erent levels of government debt a¤ect the optimal conduct of monetary and scal policies? And what do these optimal policies imply for the evolution of government debt over time? To provide an answer, this paper studies a standard monetary policy model with nominal rigidities and monopolistic competition and adds to it a scal authority that issues nominal non-state contingent debt, l...
متن کامل1 Optimal Monetary Policy
We re-examine optimal monetary policy when lump-sum taxes are unavailable. Under commitment, we show that, with alternative utility functions to that considered in Nicolini’s related analysis, the direction of the incentive to cheat may depend on the initial level of government debt, with low debt creating an incentive towards surprise deflation, but high debt the reverse. Under discretion, we ...
متن کاملNotes on Optimal Debt Management
Consider the finance of an exogenous path of public expenditure, G(t), with taxes and public debt issues. In the absence of unexpected default, borrowing does not allow the government to escape taxes in a present-value sense. But the choices of how much to borrow and in what form affect the timing of tax collections and the ways in which these collections are contingent on economic outcomes. Th...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید
ثبت ناماگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید
ورودعنوان ژورنال:
- J. Economic Theory
دوره 135 شماره
صفحات -
تاریخ انتشار 2007