A Ramsey Theory of Financial Distortions

• 成果类型: Article
• 署名作者: Bassetto, Marco; Cui, Wei
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - Minneapolis; University of London; University College London
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/729446
• 发表日期: 2024
• 页码: 2612-2654
• 关键词: optimal fiscal-policy; optimal taxation; business-cycle; adverse selection; capital taxation; public debt; liquidity; PRIVATE; quantity; search

摘要

The return on government debt is lower than that of assets with similar payoffs. We study optimal debt management and taxation when the government cannot directly redistribute toward the agents in need of liquidity but otherwise has access to a complete set of linear tax instruments. Optimal government debt provision calls for gradually closing the wedge between the returns as much as possible, but tax policy may work as a countervailing force: as long as financial frictions bind, it can be optimal to tax capital even if this magnifies the discrepancy in returns.