Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/114482
Authors: 
Gottardi, Piero
Kajii, Atsushi
Nakajima, Tomoyuki
Year of Publication: 
2014
Series/Report no.: 
Working Paper, Federal Reserve Bank of Atlanta 2014-24
Abstract: 
We consider an economy where individuals face uninsurable risks to their human capital accumulation and study the problem of determining the optimal level of linear taxes on capital and labor income together with the optimal path of the debt level. We show both analytically and numerically that in the presence of such risks it is beneficial to tax both labor and capital income and to have positive government debt.
Subjects: 
incomplete markets
Ramsey equilibrium
optimal taxation
optimal public debt
JEL: 
D52
D60
D90
E20
E62
H21
O40
Document Type: 
Working Paper

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