The Resource Capital taxation : quantitative explorations of the Inverse Euler equation, Emmanuel Farhi [and] Ivan Werning

Capital taxation : quantitative explorations of the Inverse Euler equation, Emmanuel Farhi [and] Ivan Werning

Label
Capital taxation : quantitative explorations of the Inverse Euler equation
Title
Capital taxation
Title remainder
quantitative explorations of the Inverse Euler equation
Statement of responsibility
Emmanuel Farhi [and] Ivan Werning
Title variation
Quantitative explorations of the Inverse Euler equation
Creator
Contributor
Provider
Subject
Language
eng
Summary
This paper studies the efficiency gains from distorting savings in dynamic Mirrleesian private-information economies. We develop a method that pertubs the consumption process optimally, while preserving incentive compatibility. The Inverse Euler equation holds at the new optimized allocation. Starting from an equilibrium where agents can save freely allows us to compute the efficiency gains from savings disortions. We investigate how these gains depend on a limited set of features of the economy. We find an important role for general equilibrium effects. In particular, efficiency gains are greatly reduced when, rather than assuming a fixed interest rate, decreasing returns to capital are incorporated with a neoclassical technology. We compute the efficiency gains for the incomplete market model in Aiyagari [1994] and find them to be relatively modest for the baseline calibration. For higher levels of uncertainty, the efficiency gains can be sizable, but we find that most of the improvements can then attributed to the relaxation of borrowing constraints, rather than the introduction of savings distortions. Keywords: Capital taxation, inverse Euler equation, constrained efficient, Chamley-Judds. JEL Classifications: E6, H2
Member of
Cataloging source
MYG
http://library.link/vocab/creatorName
Farhi, Emmanuel
Illustrations
illustrations
Index
no index present
Literary form
non fiction
Nature of contents
  • dictionaries
  • bibliography
  • technical reports
http://library.link/vocab/relatedWorkOrContributorName
  • Massachusetts Institute of Technology
  • Internet Archive
  • Werning, Iván
Series statement
Working paper series / Massachusetts Institute of Technology, Dept. of Economics
Series volume
working paper 06-15 [2009 revision]
http://library.link/vocab/subjectName
  • Capital levy
  • Saving and investment
  • Capital levy
  • Saving and investment
Label
Capital taxation : quantitative explorations of the Inverse Euler equation, Emmanuel Farhi [and] Ivan Werning
Instantiates
Publication
Note
"November 30, 2005. Revised version: April 10, 2009."
Bibliography note
Includes bibliographical references (p. 48-50)
Carrier category
volume
Carrier category code
nc
Carrier MARC source
rdacarrier
Color
mixed
Content category
text
Content type code
txt
Content type MARC source
rdacontent
Dimensions
28 cm.
Dimensions
unknown
Edition
Rev.
Extent
50 pages
Media category
unmediated
Media MARC source
rdamedia
Media type code
n
Other physical details
illustrations
Specific material designation
remote
System control number
  • (OCoLC)671914962
  • (OCoLC)ocn671914962
Label
Capital taxation : quantitative explorations of the Inverse Euler equation, Emmanuel Farhi [and] Ivan Werning
Publication
Note
"November 30, 2005. Revised version: April 10, 2009."
Bibliography note
Includes bibliographical references (p. 48-50)
Carrier category
volume
Carrier category code
nc
Carrier MARC source
rdacarrier
Color
mixed
Content category
text
Content type code
txt
Content type MARC source
rdacontent
Dimensions
28 cm.
Dimensions
unknown
Edition
Rev.
Extent
50 pages
Media category
unmediated
Media MARC source
rdamedia
Media type code
n
Other physical details
illustrations
Specific material designation
remote
System control number
  • (OCoLC)671914962
  • (OCoLC)ocn671914962

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