Organizational Capital and Optimal Ramsey Taxation

Alok Johri and Bidyut Talukdar ()

Department of Economics Working Papers from McMaster University

Abstract: Many recent studies have argued that it is useful to introduce a third input into the neoclassical production technology which encapsulates the productivity enhancing knowledge created in the process of production. This input, often called organizational capital, has been shown to improve the predictions of dynamic general equilibrium models, especially at the business cycle frequency. In this paper, we study the impact of organizational capital on optimal capital taxation in the Ramsey tradition and fi nd that the planner would choose to tax capital income in the presence of organizational capital even in environments where earlier models predicted zero taxes or even subsidies.

Keywords: optimal taxation; Ramsey model; learning-by-doing; organizational capital (search for similar items in EconPapers)
JEL-codes: E6 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2011-12
New Economics Papers: this item is included in nep-dge, nep-ias and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://socserv.mcmaster.ca/econ/rsrch/papers/archive/2011-09.pdf (application/pdf)

Related works:
Journal Article: Organizational capital and optimal Ramsey taxation (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2011-09

Access Statistics for this paper

More papers in Department of Economics Working Papers from McMaster University Contact information at EDIRC.
Bibliographic data for series maintained by ().