Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/53853
Authors: 
Meh, Césaire A.
Terajima, Yaz
Year of Publication: 
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

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