Optimal taxation in infinitely-lived agent and overlapping generations models: a review
Erosa, Andrés and Gervais, Martin (2001) Optimal taxation in infinitely-lived agent and overlapping generations models: a review. Economic Quarterly, 87, (2), 23-44.
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A survey of the literature on optimal taxation both in infinitely-lived agent models and life-cycle economies suggests that no consensus emerges regarding the optimal tax rate on capital income. Although the tax rate is invariably zero in the long-run steady state of infinitely-lived agent models, this same zero-tax prescription holds for life-cycle economies only under extremely stringent conditions. Both models suggest that capital income should be taxed at non-zero rates during the transition to long-run equilibrium unless individuals have separable preferences between consumption and leisure.
|Subjects:||H Social Sciences > HB Economic Theory
H Social Sciences > HJ Public Finance
|Divisions:||University Structure - Pre August 2011 > School of Social Sciences > Economics
|Date Deposited:||07 Aug 2007|
|Last Modified:||08 Jun 2012 12:17|
|RDF:||RDF+N-Triples, RDF+N3, RDF+XML, Browse.|
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