Capital Taxation: Quantitative Explorations of the Inverse Euler Equation

• 成果类型: Article
• 署名作者: Farhi, Emmanuel; Werning, Ivan
• 署名单位: Harvard University; Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/666747
• 发表日期: 2012
• 页码: 398-445
• 关键词: income; RISK; consumption; insurance; earnings; INEQUALITY; CHOICE

摘要

Economies with private information provide a rationale for capital taxation. In this paper we ask what the welfare gains from following this prescription are. We develop a method to answer this question in standard general equilibrium models with idiosyncratic uncertainty and incomplete markets. We find that general equilibrium forces are important and greatly reduce the welfare gains. Once these effects are taken into account, the gains are relatively small in our benchmark calibration. These results do not imply that dynamic aspects of social insurance design are unimportant, but they do suggest that capital taxation may play a modest role.