Economics Department Working Paper Series
Working Paper Number
2011-25
Publication Date
2011
Abstract
Fiscal policy is needed to avoid dynamic inefficiency and maintain full employment in a modified Diamond OLG model with imperfect competition. A distributionally neutral tax scheme can maintain full employment in the face of variations in .household confidence.. No variations in taxes will be needed if households correctly anticipate future taxes: the tax policy functions as an insurance scheme.
Recommended Citation
Skott, Peter and Ryoo, Soon, "Public debt in an OLG model with imperfect competition" (2011). Economics Department Working Paper Series. 133.
Retrieved from https://scholarworks.umass.edu/econ_workingpaper/133