Anticipation, learning and welfare: the case of distortionary taxation
Emanuel Gasteiger and
MPRA Paper from University Library of Munich, Germany
We study the impact of anticipated fiscal policy changes in the Ramsey economy when agents form expectations using adaptive learning. We extend the existing framework by distortionary taxes as well as elastic labour supply, which makes agents' decisions non-predetermined but more realistic. We detect that the dynamic responses to anticipated tax changes under learning have oscillatory behaviour. Moreover, we demonstrate that this behaviour can have important implications for the welfare consequences of fiscal reforms.
Keywords: Fiscal Policy; Adaptive Learning; Oscillations (search for similar items in EconPapers)
JEL-codes: D84 E32 E62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dge and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/30625/1/MPRA_paper_30625.pdf original version (application/pdf)
Journal Article: Anticipation, learning and welfare: the case of distortionary taxation (2014)
Working Paper: Anticipation, Learning and Welfare: the Case of Distortionary Taxation (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:30625
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().