This paper studies relationships between the determinacy of a stationary equilibrium in the perfect foresight dynamics, and its local stability in dynamics arising from econometric learning procedures. There is no clear links in linear scalar economies where agents forecast only one perods...

Bubble solutions of rational expectations models are identified by extra components that arise in addition to market fundamentals. In general there still exist many equilibrium paths relying on a minimal set of state variables, i.e., along which the number of lags that influence the current...

This paper studies relationships between the local determinacy of a stationary equilibrium in the perfect foresight dynamics, and its local stability in dynamics arising from econometric learning procedures. There is no clear links in linear scalar economieds where agents forecast only one...

This paper studies the relationships between determinacy and stability under recurdive learning of rational expectations equilibria. The analysis is carried out within a non-stochastic linear temporary general equilibrium framework with predetermined variables (or memory). Determinacy of the...

This paper analyses an example of nonstationary stochastic endogenous fluctuations. It studies the existence of Markovian sunspot equilibria on the rates of growth in a linear one step forward looking economy with one predetermined variable. It is shown that asymptotically stable stochastic...

Indirect taxes contribute to a sizeable part of government revenues around the world. Typically there are few different tax rates, and the goods are partitioned into classes associated with each rate. The present paper studies how to group the goods in these few classes. We take as given the...

We provide a necessary condition for optimal commodity taxes when agents differ according to labor skill and consumption tastes and when the government can also use a general nonlinear tax on labor income. The discouragement index of commodities in shown to be the sum of (1) the distributive...

A government designs transfers to agents in the absence of information on their preferences. The second-best allocation is equal sharing among citizens when the awards are deterministic. We provide a necessary and sufficient condition under which lotteries improve upon the egalitarian outcome....

A government agency delegates to a provider (hospital, medical gatekeeper, school, social worker) the decision to supply a service or treatment to individual recipients. The agency does not perfectly know the distribution of individual treatment costs in the population. The single-crossing...

In a second best environment, the optimal policy choice sometimes follows first best rules, as described in a number of scattered works. This paper presents a formal general argument which allows to unify much of the literature. It lays down the information structure and separability...