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http://hdl.handle.net/10419/53853
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| Title: | | Uninsurable investment risks and capital income taxation  |
| Authors: | | Meh, Césaire A. Terajima, Yaz |
| Issue Date: | | 2009 |
| Series/Report no.: | | Bank of Canada Working Paper 2009,3 |
| Abstract: | | This paper studies the capital accumulation and welfare implications of reducing capital income taxation in a general equilibrium economy with uninsurable investment risks. It has been shown that, with uninsurable investment risks, under-accumulation of capital may result compared to the complete markets economy. We show that reducing somewhat the capital income tax rate increases the capital stock and leads to a welfare gain. The complete elimination of the capital income tax, however, is not necessarily welfare improving. |
| Subjects: | | Economic models |
| JEL: | | E21 E22 E62 G32 H24 H25 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Bank of Canada Working Papers
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