| 来源类型 | Discussion paper
|
| 规范类型 | 论文
|
| 来源ID | DP4570
|
| DP4570 The Colombian Conflict: Uribe's First 17 Months |
| Michael Spagat; Jorge Restrepo
|
| 发表日期 | 2004-08-23
|
| 出版年 | 2004
|
| 语种 | 英语
|
| 摘要 | How should aggregate public expenditures be traded off against their financing costs? We incorporate public expenditures into a standard neoclassical growth setup with model policy choice as made by a government choosing tax rates and spending so that the resulting competitive equilibrium allocation maximizes consumer welfare. An additional key restriction that the government faces in our model is that it cannot commit to future policy. This restriction binds: current income taxes influence past savings decisions as well as past work decisions, and these effects are ignored by governments without access to commitment. We solve for equilibria where ?reputational? mechanisms are not operative: we characterize Markov-perfect equilibria of the dynamic game between successive governments. We characterize equilibria in terms of an intertemporal first-order condition (a ?generalized Euler equation?, GEE) for the government and we use this condition both to gain insight into the nature of the equilibrium and as a basis for computation. The GEE reveals how the government optimally trades off tax wedges over time. For a calibrated economy, we find that when the tax base available to the government is capital income ? an inelastic source of funds at any moment in time ? the government still refrains from taxing at confiscatory rates. As a result, the economy is far from the mix of public and private goods that would be optimal in a static context; in return, steady-state savings are less distorted. |
| 主题 | Public Economics
|
| 关键词 | Time-consistency
Optimal taxation
Markov-perfect equilibrium
|
| URL | https://cepr.org/publications/dp4570
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| 来源智库 | Centre for Economic Policy Research (United Kingdom)
|
| 资源类型 | 智库出版物
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| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/533487
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推荐引用方式
GB/T 7714 |
Michael Spagat,Jorge Restrepo. DP4570 The Colombian Conflict: Uribe's First 17 Months. 2004.
|
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