Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109056
Authors: 
Kaszab, Lorant
Marsal, Ales
Year of Publication: 
2013
Series/Report no.: 
Cardiff Economics Working Papers E2013/13
Abstract: 
Distortionary income taxation in a standard New Keynesian model substantially increases the nominal term-premium on long-term bonds relative to a model with lumpsum taxes. Also the empirical level of the nominal term premium can be matched with lower risk-aversion coefficient in case of a model with income taxes relative to a model with long-run inflation risks.
Subjects: 
zero-coupon bond
nominal term premium
third-order approximation
distortionary income taxation
JEL: 
E13
E31
E43
E44
E62
Document Type: 
Working Paper

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