NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Political Economy of Ramsey Taxation

Daron Acemoglu, Mikhail Golosov, Aleh Tsyvinski

NBER Working Paper No. 15302
Issued in August 2009
NBER Program(s):   EFG   PE   POL

We study the dynamic taxation of capital and labor in the Ramsey model under the assumption that taxes and public good provision are decided by a self-interested politician who cannot commit to policies. We show that, as long as the discount factor of the politician is equal to or greater than that of the citizens, the Chamley-Judd result of zero long-run taxes holds. In contrast, if the politician is less patient than the citizens, the best (subgame perfect) equilibrium from the viewpoint of the citizens involves long-run capital taxation.

download in pdf format
   (282 K)

email paper

This paper is available as PDF (282 K) or via email.

Acknowledgments

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w15302

Published:

  • Acemoglu, Daron & Golosov, Mikhail & Tsyvinski, Aleh, 2011. "Political economy of Ramsey taxation," Journal of Public Economics, Elsevier, vol. 95(7), pages 467-475. ,
  • Acemoglu, Daron & Golosov, Mikhail & Tsyvinski, Aleh, 2011. "Political economy of Ramsey taxation," Journal of Public Economics, Elsevier, vol. 95(7-8), pages 467-475, August.

Users who downloaded this paper also downloaded these:
Acemoglu, Golosov, and Tsyvinski w15400 Power Fluctuations and Political Economy
Acemoglu w15693 Institutions, Factor Prices and Taxation: Virtues of Strong States?
Acemoglu, Egorov, and Sonin w15230 Political Selection and Persistence of Bad Governments
Mankiw, Weinzierl, and Yagan w15071 Optimal Taxation in Theory and Practice
Acemoglu w15944 Theory, General Equilibrium and Political Economy in Development Economics
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us