Landier, Augustin; Plantin, Guillaume - Institut d'Économie Industrielle (IDEI), Toulouse … - 2011
We model the link between inequality, lack of political commitment, and ex-cessive risk taking. If politicians cannot commit to a long-term tax schedule, increasing returns to tax avoidance induce the middle class to take on non rewarded ?nancial risk despite risk aversion. Electoral pressure...