Guo, Jang-Ting; Krause, Alan - Department of Economics and Related Studies, University … - 2010
probability that the government cannot commit to its future tax policy. In this "loose commitment" environment, we find that even … commitment is higher than 98%. Loose commitment also reverses the short-run welfare effects of changes in most model parameters …-skill individuals in the economy increases. Finally, our main findings remain qualitatively robust to a setting in which loose …
