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4 edition of Optimal taxation in an RBC model found in the catalog.

Optimal taxation in an RBC model

Pierpaolo Benigno

Optimal taxation in an RBC model

a linear-quadratic approach

by Pierpaolo Benigno

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Published by National Bureau of Economic Research in Cambridge, MA .
Written in English

    Subjects:
  • Income tax -- Mathematical models.,
  • Taxation -- Mathematical models.

  • Edition Notes

    StatementPierpaolo Benigno, Michael Woodford.
    SeriesNBER working paper series ;, working paper 11029, Working paper series (National Bureau of Economic Research : Online) ;, working paper no. 11029.
    ContributionsWoodford, Michael, Professor., National Bureau of Economic Research.
    Classifications
    LC ClassificationsHB1
    The Physical Object
    FormatElectronic resource
    ID Numbers
    Open LibraryOL3476644M
    LC Control Number2005616173

    Age Related Optimal Income Taxation. Accounting for the role of financial system and money holdings in an optimal nonlinear income tax model, we argue that capital income taxation is a non. Investment and insurance products offered through RBC Wealth Management are not insured by the FDIC or any other federal government agency, are not deposits or other obligations of, or guaranteed by, a bank or any bank affiliate, and are subject to investment risks, including possible loss of the principal amount invested. The different households are distinguished by their different labour productivities. We also investigate the dynamic responses of the model when tax rates are changed, as well as the implications of using different specifications of the households’ utility function on the optimal taxation results and the dynamic properties of the model. Taxation, imposition of compulsory levies on individuals or entities by governments. Taxes are levied in almost every country of the world, primarily to raise revenue for government expenditures, although they serve other purposes as well. Learn more about taxation in this article.


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Optimal taxation in an RBC model by Pierpaolo Benigno Download PDF EPUB FB2

Here we illustrate both the potential problems with naive LQ approximation and the application of our own method in the context of a well-known example, the analysis of dynamic optimal taxation of income from labor and capital in an RBC model, treated by Chari et al. 4 The example is of interest not only because it is a simple case in Cited by: Optimal Taxation in an RBC Model: A Linear-Quadratic Approach Pierpaolo Benigno, Michael Woodford.

NBER Working Paper No. Issued in January NBER Program(s):Economic Fluctuations and Growth Program, Monetary Economics Program. Optimal Taxation in an RBC Model: A Linear-Quadratic Approach ⁄ Pierpaolo Benigno New York University Michael Woodford Columbia University August 10, Abstract We reconsider the optimal taxation of income from labor and capital in the stochastic growth model analyzed by Chari et al.

(, ), but using a. Optimal taxation in an RBC model: a linear-quadratic approach. "We reconsider the optimal taxation of income from labor and capital in the stochastic growth model analyzed by Chari et al.

(, ), but using a linear-quadratic (LQ) approximation to derive a log-linear approximation to the optimal policy rules.

" Optimal Taxation in an RBC Model: A Linear-Quadratic Approach," NBER Working PapersNational Bureau of Economic Research, Inc. References listed on IDEAS HTML HTML with abstract plain text plain text with abstract BibTeX RIS (EndNote, RefMan, ProCite) ReDIF JSON Pierpaolo Benigno & Michael Woodford, Optimal Taxation in an RBC Model: A Linear-Quadratic Approach ⁄y Pierpaolo Benigno New York University Michael Woodford Columbia University December 5, Abstract We reconsider the optimal taxation of income from labor and capital in the stochastic growth model analyzed by Chari et al.

(, ), but using a. We reconsider the optimal taxation of income from labor and capital in the stochastic growth model analyzed by Chari et al.

(, ), but using a linear-quadratic (LQ) approximation to derive a log-linear approximation to the optimal policy rules.

Optimal Taxation in an RBC Model: A Linear-Quadratic Approach by Pierpaolo Benigno & Michael Woodford; Optimal Monetary and Fiscal Policy in a Liquidity Trap by Gauti B.

Eggertsson & Michael Woodford; Optimal Stabilization Policy When Wages and Prices are Sticky: The Case of a Distorted Steady State by Pierpaolo Benigno & Michael Woodford.

markets, and asset (savings) markets. The representative household’s optimal tradeoffs between its supplies and demands in these markets are described by (9) and (10). Again, see Kydland and Prescott (), King and Rebelo (), or any description of the basic RBC model for more on the derivations of these conditions.

Graduate Macro Theory II: Fiscal Policy in the RBC Model Eric Sims University of Notre Dame Spring 1 Introduction This set of notes studies scal policy in the RBC model. Fiscal policy refers to government spending and nance.

Government spending is a component of aggregate expenditure; we could model it. "Optimal Taxation in an RBC Model: A Linear Quadratic Approach." Journal of Economic Dynamics and Control 30 (): – Chamley, C. "Efficient Tax Reform in a Dynamic Model of General Equilibrium." Quarterly Journal of Economicsno.

2 (): – ———. "Optimal Taxation of Capital Income in General Equilibrium with. The Real Business Cycle Model The RBC model is a stochastic version of the optimal consumption prob-lem analyzed above. In the basic RBC model, it is assumed that there is uncertainty with regard to technology or production function.

This model brings out the e ects of technology shock on consumption, output, employ-ment etc. the optimal taxation models that use utilitarian social welfare functions survive being recast in Pareto terms, which in turn suggests that the precise form of the social welfare function (at least in the class of all Pareto functions) is not very important for some findings.

The paper is organised as folIows. Section 2 describes the RBC model incorporating the government sector, taking into account the German system of taxes and levies. First­ ly, optimal economic plans are derived for the model's economic agents, i.e. households and firms.

Optimal Taxation in an RBC Model: A Linear-Quadratic Approach. [Pierpaolo Benigno; Michael Woodford] -- We reconsider the optimal taxation of income from labor and capital in the stochastic growth model analyzed by Chari et al.

(, ), but using a. In addition, RBC-based models came to be widely used as laboratories for policy analysis in general and for the study of optimal fiscal and monetary pol-icy in particular.1 These policy applications reflected the fact that RBC models 1See Chari and Kehoe () for a review of the literature on optimal fiscal and monetary policy in RBC models.

• how to calibrate a model • how to set up a Ramsey taxation problem • RBC model: cannot even think about these issues. Real variables are completely separate from nominal variables • Compare with equation (16) in Chapter of Gali’s book and expression just below.

In particular, we should check whether in the model it’s true that output, employment, consumption, investment and productivity more or less move in the same direction when thereisashock. nality. The optimal tax does not necessarily elimi-nate the activity that generates the externality; for example, even with an optimal tax there may still be some pollution.

For more on the corrective role of taxes in the case of externalities, see Baumol and Oates (). While the optimal taxation. Aug 21,  · Estimates the baseline RBC model on simulated data.

inovelpapery.icu Computes the welfare-maximizing optimal labor tax rate in a baseline RBC model with only TFP shocks. It does so by defining welfare recursively in the model block and calling an optimizer to find the parameter for the steady state tax rate that maximizes welfare.

It has two main components: 1) the risk-based capital formula, that established a hypothetical minimum capital level that is compared to a company’s actual capital level, and 2) a risk-based capital model law that grants automatic authority to the state insurance regulator to.

in optimal tax theory suggest that the information needed to implement the differentiated tax-ation prescribed by optimal tax theory may be easier to obtain than previously believed.

The paper also points to the strong similarity between optimal commodity tax rules and the rules for optimal source-based capital income taxation. Time-Consistent Consumption Taxation Sarolta Lacz oy Ra aele Rossiz October Abstract We characterise optimal scal policies when the government has access to consumption taxa-tion but cannot credibly commit to future policies, in a calibrated Real Business Cycle model of.

Since the optimal policy maker in our model faces similar trade-offs as the policy maker in the model by Schmitt-Grohé and Uribe (), the steady-state values of the tax rates are similar. Approximation of optimal policy rules using linear rules.

We want to approximate optimal Cited by: the baseline RBC model (or any other model): an agent with the preference to smooth consumption over time will invest in productive periods and eat capital in unproductive periods.

The model Now let’s put this into a model. We’ll take the equilibrium growth model that we’ve already looked at, and add a labor-leisure choice, and a. A basic MIU model Firm side of model is same as in basic RBC model.

Collecting equilibrium conditions I Given an exogenous process for the productivity shock and the nominal stock of money, equilibrium consists of time paths for output, real money balances, consumption, capital, employment, wages, the. Optimal tax theory or the theory of optimal taxation is the study of designing and implementing a tax that maximises a social welfare function subject to economic constraints.

The social welfare function used is typically a function of individuals' utilities, most commonly some form of utilitarian function, so the tax system is chosen to maximise the aggregate of individual utilities. Redistributive Taxation in a Roy Model Casey Rothschild Wellesley College Florian Scheuer Stanford University May Abstract We consider optimal redistribution in a model where individuals can self-select into one of several possible sectors based on heterogeneity in a multidimensional skill vector.

Optimal Taxation in a Growth Model with Public Capital Stock and Adjustment Costs By Been-Lon Chen* Academia Sinica April Abstract This paper extends Turnovsky (a, b) into a dynamic AK growth model with public capital accumulation and adjustment costs, and studies the optimal tax structure between capital and consumption.

Optimal Tax Mix On efficiency grounds, the optimal tax mix requires simply a lump-sum income tax, and commodity taxes are not used.

On equity grounds, both income and commodity taxes should be used in general; however, under some restrictive conditions, the optimal form of com-modity tax rates that are imposed in the presence of an optimal. RBC - UK Tax Strategy Tax risk management and governance. RBC is a diversified financial services group operating in 36 countries globally.

We are subject to a wide range of complex tax rules and regulations across our different products, services and geographies. This paper addresses the question of how taxation affects the cost of capital of firms and value of firms as measured by Tobin’s q.

We construct a Real Business Cycle model and derive our original unlevered q on an after-tax basis, by removing financial tax shield effects in order to disentangle real operating profitability of firms and their financing inovelpapery.icu: Kubota Keiichi, Saito Susumu, Takehara Hitoshi.

The Economics of Taxation (The MIT Press) [Bernard Salanié] on inovelpapery.icu *FREE* shipping on qualifying offers. A concise and rigorous text that combines theory, empirical work, and policy discussion to present core issues in the economics of taxation.

This concise introduction to the economic theories of taxation is intuitive yet rigorousCited by: Tax Structure, Optimal Fiscal Policy, and the Business Cycle This article develops an RBC model in which government fiscal variables such as tax rates and public expenditures are endogenous.

The authors characterize the "optimal" behavior of fiscal policy over the business cycle for two different tax structures and relate this behavior to Cited by: 3. But if the social planner is allowed to be unconstrained in choosing a tax system, then the problem of optimal taxation becomes too easy: the optimal tax is simply a lump-sum tax.

After all, if the economy is described by a representative consumer, that consumer is going to pay the entire tax bill of the government in one form or another. RBC Investment Strategy Committee To maintain the optimal asset allocation for your a+ Portfolio, we align it with the recommendations of our RBC Investment Strategy Committee, which is comprised of senior representatives from all parts of RBC, including chief investment officers, portfolio strategists, economists and research analysts.

This idea, first explored in a seminal article by James Mirrlees (), provides a framework for studying the fundamental question of how income should be taxed.1 In this framework, which has become known as the Mirrlees approach to optimal taxation, an optimal tax system is one that implements the best economic outcome attainable under the.

Real business-cycle theory (RBC theory) is a class of new classical macroeconomics models in which business-cycle fluctuations to a large extent can be accounted for by real (in contrast to nominal) inovelpapery.icu other leading theories of the business cycle, [citation needed] RBC theory sees business cycle fluctuations as the efficient response to exogenous changes in the real economic.

The Theory of Optimal Income Taxation. We consider optimal age‐dependent income taxation in a dynamic model where the labor‐leisure choice is the extensive margin, each household faces. RBC Direct Investing Inc.

and Royal Bank of Canada are separate corporate entities which are affiliated. RBC Direct Investing Inc. is a wholly owned subsidiary of Royal Bank of Canada and is a Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund.

Whether you're looking for day to day banking, savings or student accounts, RBC Royal Bank has a variety of personal bank accounts to meet your needs.Dec 19,  · This paper derives optimal income tax and human capital policies in a dynamic life cycle model of labor supply and risky human capital formation.

The wage is a function of both stochastic, persistent, and exogenous "ability" and endogenous human inovelpapery.icu by: I. Static Optimal Taxation How should government set taxes? Suppose that the government needs to raise a given amount of revenue to nance public programs and that it cares about social welfare.

The Second Welfare Theorem tells us that any Pareto e cient allocation can be achieved through lump-sum taxation.