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Arias, Maria - 2019

the United States remain constantly low and with no clear sign of convergence. This approach allows them to study the … issue of economic convergence (or lack of it) directly. The authors describe evidence pointing to the existence of both … regional levels. Finally, they point out challenges to the benchmark neoclassical growth theory, which predicts convergence to …

Persistent link: https://www.econbiz.de/10012903471

Don't tax capital - optimal Ramsey taxation in heterogeneous agent economies with quasi-linear preferences

Chien, YiLi; Wen, Yi - 2019

We build a tractable heterogeneous-agent incomplete-markets model with quasi-linear preferences to address a set of long-standing issues in the optimal Ramsey taxation literature. The tractability of our model enables us to analytically prove the existence of a Ramsey steady state and establish...

Persistent link: https://www.econbiz.de/10011997961

Optimal fiscal policies under market failures

Chien, YiLi; Wen, Yi - 2020

The aggregate capital stock in a nation can be overaccumulated for many different reasons. This paper studies which policy or policy mix is more effective in achieving the socially optimal (golden rule) level of aggregate capital stock in an infinite-horizon heterogeneous-agents...

Persistent link: https://www.econbiz.de/10012216720

Are government bonds net wealth or a liability? : optimal debt and taxes in an OLG model with uninsurable income risk

Chien, YiLi; Wen, Yi; Yu, HsinJung - 2020

The rapidly growing national debt in the U.S. since the 1970s has alarmed and intrigued the academic world. Consequently, the concept of dynamic (in)efficiency in an overlapping generations (OLG) world and the importance of the heterogeneous-agents and incomplete markets (HAIM) hypothesis to...

Persistent link: https://www.econbiz.de/10012216790

Optimal Ramsey capital income taxation : a reappraisal

Chien, YiLi; Wen, Yi - 2017

This paper addresses a long-standing problem in the optimal Ramsey capital taxation literature. The tractability of our model enables us to solve the Ramsey problem analytically along the entire transitional path. We show that the conventional wisdom on Ramsey tax policy and its underlying...

Persistent link: https://www.econbiz.de/10011780930

Time-Inconsistent Optimal Quantity of Debt

Chien, YiLi; Wen, Yi - 2020

A key property of the Aiyagari-type heterogeneous-agent models is that the equilibrium interest rate of public debt lies below the time discount rate. This fundamental property, however, implies that the Ramsey planner's fiscal policy may be time-inconsistent because the forward-looking planner...

Persistent link: https://www.econbiz.de/10014048725

Should Capital Be Taxed?

Chen, Yunmin; Chien, YiLi; Wen, Yi; Yang, C.C - 2020

We design an infinite-horizon heterogeneous-agents and incomplete-markets model to demonstrate analytically that in the absence of any redistributional effects of government policies, optimal capital tax is zero despite capital overaccumulation under precautionary savings and borrowing...

Persistent link: https://www.econbiz.de/10014093257

Optimal Ramsey Capital Income Taxation —A Reappraisal

Chien, YiLi - 2019

Persistent link: https://www.econbiz.de/10013210482

Hayashi Meets Kiyotaki and Moore : A Theory of Capital Adjustment Costs

Wang, Pengfei - 2011

Firm-level investment is lumpy and volatile but aggregate investment is much smoother and highly serially correlated. These different patterns of investment behavior have been viewed as indicating convex adjustment costs at the aggregate level but non-convex adjustment costs at the firm level....

Persistent link: https://www.econbiz.de/10013132690