I show within a two-period overlapping generations model with income tax evasion that when the penalty rate set by the government is su¢ ciently small, it is theoretically possible for the capital stock to exceed the golden-rule level on the balanced-growth path. However, such a dynamic...

This note offers a proof of the necessary conditions for optimal control problems that involve a finite number of discrete switches in the objective functional over the planning horizon.

This note offers a proof of the necessary conditions for optimal control problems that involve a finite number of discrete switches in the objective functional over the planning horizon.