Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/53853 
Year of Publication: 
2009
Series/Report no.: 
Bank of Canada Working Paper No. 2009-3
Publisher: 
Bank of Canada, Ottawa
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
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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