Fernandez-Villaverde, Jesus; Aghion, Philippe; Akcigit, Ufuk - National Bureau of Economic Research (NBER) - 2013
Chamley (1986) and Judd (1985) showed that, in a standard neoclassical growth model with capital accumulation and … infinitely lived agents, either taxing or subsidizing capital cannot be optimal in the steady state. In this paper, we introduce …, a zero tax/subsidy on capital becomes suboptimal. In particular, the higher the level of public expenditure and the …