Economics, Econometrics and Finance
4 years ago

New study reveals fluctuating capital taxes impact economy after shocks.

2 views
Journal of Political Economy
Capital Taxation and Ownership When Markets Are Incomplete
Emmanuel Farhi

Paper Summary

The article explores how to tax capital in an economy with incomplete markets and unexpected events. The researchers find that labor taxes stay steady, while capital taxes can change a lot, especially after budget shocks. Overall, capital taxes even out over time.

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