Dynamic tax rates could lead to economic chaos, study finds
The article introduces a new way to look at taxes in economic models, showing that certain tax rates can lead to unpredictable outcomes in the economy. By adjusting tax rates on labor income, the researchers found that the economy can become unstable if certain conditions are met, such as high elasticity of capital-labor substitution and wage elasticity of labor supply. These findings are similar to those seen in other economic models, bringing together different theories in a new way.