Bond, Philip; Pande, Rohini - 2005
tax
policy T, and instead adopts T0. For concreteness, we take T0 to be the no-intervention
policy, T0 (y) ≡ y.
(5) The … government observes incomes and executes its policy.
From the agents’ perspective, the tax policy when they make their investment … stability. For concreteness, consider the following exam-
ple: f1 (η) = η, f0 (η) = 3/4−η/2, and a tax policy defined by
T (y …