We present a method to analyze the welfare cost of price distortions created by taxes on the incomes of capital and labor and on consumption in an intertemporal model of general equilibrium. This efficiency cost depends in an important way on the production technology. It is not very sensitive...

When government liabilities (including money) are held in private portfolios only as stores of value, and do not provide additional benefits (as liquidity services), the real variables in an economy with uncertainty are not affected by the government's trading in assets. There are also policies...

The optimal taxation problem is analyzed in a general equilibrium model of optimal growth. The private sector is represented by a single competitive household endowed with perfect foresight, and an infinite life. This household maximizes an intertemporal stationary utility function. Public...

The optimal capital income tax is analyzed in the framework of intertemporal efficient taxation. The relation between the zero tax in the long-run and the equality between private and social discount rates is emphasized. The properties of the dynamic second best path described for a specific...

A model is presented which is derived from some observations of Keynes on the nature of capital. The allocation of investment is analyzed in two economies with random demand shocks which are identical except for the types of markets. In the first, the combination of an asset and forward markets...

In developing countries most of the financial assets are deposits at commercial banks. This article focuses on the implicit taxation of financial assets through seigniorage, reserve requirements, lending targets, and interest ceilings combined with inflation. The impact of taxation on financial...

This paper analyzes the dynamics of general equilibrium models with externalities in human capital accumulation which extends that of Uzawa-Lucas. Multiple balanced growth paths, with different growth rates, and a continuum of equilibria (with a unique balanced growth path) may exist. In...