Abstract
This paper presents a full characterization of the equilibrium value set of a Ramsey tax model. More generally, it develops a dynamic programming method for a class of policy games between the government and a continuum of households. By selectively incorporating Euler conditions into a strategic dynamic programming framework, we wed two technologies that are usually considered competing alternatives, resulting in a substantial simplification of the problem.
Original language | English (US) |
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Pages (from-to) | 1491-1518 |
Number of pages | 28 |
Journal | Econometrica |
Volume | 69 |
Issue number | 6 |
DOIs | |
State | Published - 2001 |
Keywords
- Capital taxation
- Government credibility
- Recursive methods
- Time consistent government policy