In this note we compare the laissez-faire steady-state solution in the Howitt and Aghion (1998) model to the social optimum. The analysis offers several new insights in comparison to the welfare analysis in Aghion and Howitt (1992). We find various new distortions between private and optimal...

In this note we compare the laissez-faire steady-state solution in the Howitt and Aghion (1998) model to the social optimum. The analysis offers several new insights in comparison to the welfare analysis in Aghion and Howitt (1992). We find various new distortions between private and optimal...

This paper studies optimal taxation in dynamic economies with a simple form of human capital accumulation as considered in Bull (1993). We show that in a Ramsey equilibrium along any balanced growth path, the taxes on wage income and (physical) capital income must be zero. Under the assumption...

This paper studies optimal taxation in dynamic economies with a simple form of human capital accumulation as considered in Bull (1993). We show that in a Ramsey equilibrium along any balanced growth path, the taxes on wage income and (physical) capital income must be zero. Under the assumption...