New Dynamic Public Finance: A User's Guide
Published Date
Copyright 2007
ISBN 02620123919780262012393
This paper reviews recent advances in the theory of optimal policy in a dynamic Mirrlees setting, and contrasts this approach to the one based on the representative-agent Ramsey framework. We revisit three classical issues and focus on insights and results that contrast with those from the Ramsey approach. In particular, we illustrate, using a simple two period economy, the implications for capital taxation, tax smoothing, and time inconsistency.
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Copy CitationMikhail Golosov, Aleh Tsyvinski, and Iván Werning, NBER Macroeconomics Annual 2006, Volume 21 (MIT Press, 2007), chap. 5, https://www.nber.org/books-and-chapters/nber-macroeconomics-annual-2006-volume-21/new-dynamic-public-finance-users-guide.