Theory of tax smoothing in the small open economy

Lance A. Fisher; Geoffrey H. Kingston

doi:10.1016/j.econlet.2004.01.007

Theory of tax smoothing in the small open economy

Lance A. Fisher, Geoffrey H. Kingston^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

Abstract

We derive necessary and sufficient conditions for the martingale-like behavior of tax rates. The world real interest rate is exogenous to the small domestic economy. Consumers are risk averse and markets are incomplete. The government's loss function is not ad hoc.

Original language	English
Pages (from-to)	1-7
Number of pages	7
Journal	Economics Letters
Volume	85
Issue number	1
DOIs	https://doi.org/10.1016/j.econlet.2004.01.007
Publication status	Published - Oct 2004
Externally published	Yes

Keywords

Incomplete markets
Martingale
Ramsey problem
Small open economy

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10.1016/j.econlet.2004.01.007

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title = "Theory of tax smoothing in the small open economy",

abstract = "We derive necessary and sufficient conditions for the martingale-like behavior of tax rates. The world real interest rate is exogenous to the small domestic economy. Consumers are risk averse and markets are incomplete. The government's loss function is not ad hoc.",

keywords = "Incomplete markets, Martingale, Ramsey problem, Small open economy",

author = "Fisher, {Lance A.} and Kingston, {Geoffrey H.}",

year = "2004",

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T1 - Theory of tax smoothing in the small open economy

AU - Fisher, Lance A.

AU - Kingston, Geoffrey H.

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AB - We derive necessary and sufficient conditions for the martingale-like behavior of tax rates. The world real interest rate is exogenous to the small domestic economy. Consumers are risk averse and markets are incomplete. The government's loss function is not ad hoc.

KW - Incomplete markets

KW - Martingale

KW - Ramsey problem

KW - Small open economy

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DO - 10.1016/j.econlet.2004.01.007

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VL - 85

SP - 1

EP - 7

JO - Economics Letters

JF - Economics Letters

IS - 1

ER -

Theory of tax smoothing in the small open economy

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Keywords

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