In a multi-period Mirrlees (1971) setting individuals face privately observed shocks to their ability. Each individual's productivity is the product of this idiosyncratic ability and an aggregate component which is also stochastic but publicly observed. Using a separable iso-elastic...

An important finding of the new dynamic public finance literature is the validity of Atkinson and Stiglitz' uniform commodity tax prescription in a dynamic Mirrleesian setting. However, this need not apply to the taxation of goods across time, i.e., the taxation of savings. We model an...

We study constrained efficient aggregate risk sharing and its consequence for the behavior of macro-aggregates in a dynamic Mirrlees’s (1971) setting. Privately observed idiosyncratic productivity shocks are assumed to be independent of i.i.d. publicly observed aggregate shocks. Yet, private...

We study the optimal inflation tax in an economy with heterogeneous agents subject to nonlinear taxation of labor income. We find that the Friedman rule is Pareto efficient when combined with a nondecreasing labor income tax. In addition, the optimum for a utilitarian social welfare function...

Golosov et al. (2003) have extended Atkinson and Stiglitz's uniform tax prescription to a dynamic Mirrlees' (1971) economy under the assumption that the government fully controls the agent's savings. When savings are not controlled by the government we show that the result is no longer valid:...