Optimal taxation without state-contingent debt, the Ramsey allocation for a given multiplier, and tax smoothing of consumption and taxes in complete and incomplete

Josheski, Dushko and Miteva, Natasha and Boskov, Tatjana (2024) Optimal taxation without state-contingent debt, the Ramsey allocation for a given multiplier, and tax smoothing of consumption and taxes in complete and incomplete. Yearbook - Faculty of Tourism and Business Logistics, 4 (1). pp. 71-91. ISSN 2671-3969

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Abstract

This paper illustrates optimal fiscal and monetary policies without state-contingent debt as in Aiyagari, Marcet, Sargent, and Seppälä (2002) and the issue of competitive equilibrium with distorting taxes, tax smoothing as in Barro (1979) but without state-contingent debt, and Ramsey problem without state-contingent debt. Numerical model od optimal taxation without state-contingent debt proves that the total resources available to the government (from taxes) are entirely used for consumption purposes, possibly reflecting a scenario where government spending equals tax revenue, and there is no debt accumulation. Optimal taxation without state-contingent debt shows that the contact between tax rate and debt is of 0th-order: The curves touch at a point but don't necessarily have the same tangent or curvature at that point. The tax rate curve is convex (minimum),debt curve is concave (maximum).

Item Type:	Article
Subjects:	Social Sciences > Economics and business
Divisions:	Faculty of Tourism and Business Logistics
Depositing User:	Dusko Josevski
Date Deposited:	03 Jan 2025 07:50
Last Modified:	03 Jan 2025 07:50
URI:	https://eprints.ugd.edu.mk/id/eprint/35361

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