Nonoptimality of the Friedman Rule with Capital Income Taxation
Petrucci, Alberto (2008) Nonoptimality of the Friedman Rule with Capital Income Taxation. [Working Paper]. p. 34.
|PDF (Full text) - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader|
Official URL: http://www.nuffield.ox.ac.uk/Economics/papers/2008...
This paper studies the efficient taxation of money and factor income in intertemporal optimizing growth models with infinite horizons, transaction costs technologies and flexible prices. Second-best optimality calls for a positive inflation tax and a non-zero capital income tax when there are restrictions on taxation of production factors or profits/rents. Our cases of nonoptimality of the Friedman rule —which differ from those of Mulligan and Sala-i-Martin (1997) and extend substantially those of Schmitt-Grohè and Uribe (2004a)— follow from the violation of the Diamond and Mirrlees (1971) principle on production efficiency.
|Item Type:||Report / Paper (Working Paper)|
|Research documents and activity classification:||Working Papers > Non-Refereed Working Papers / of national relevance only|
|Divisions:||Department of Business and Management|
|Uncontrolled Keywords:||Optimal inflation tax. Factor taxation. Transaction costs technology. Second-best analysis. Capital accumulation.|
|MIUR Scientific Area:||Area 13 - Economics and Statistics > SECS-P/01 Political Economy|
|Deposited By:||Chiara Annulli (admin)|
|Deposited On:||27 Oct 2009 15:44|
|Last Modified:||05 Apr 2013 22:12|
Repository Staff Only: item control page