Reference no: EM131494176
Optimal Taxation
Consider a two-period economy, where households have preferences
u(c1, c2) = lnc1 + βlnc2.
Households receive an income endowment y in the first period only, and decide optimally how to allocate it between consumption in the two periods. They can save at rate (1 + r) to finance consumption in the second period. The government has expenditures g in the first period that finances with consumption taxes {τ1, τ2} in the two periods.
Assume, to simplify the algebra, that β = 1 and r = 0.
(a) Write the household problem and determine optimal consumption {c*1, c*2} as a function of {y, τ1, τ2}.
(b) Suppose the benevolent government chooses the tax rates {7'1} 7'3} in order to maximize household welfare. Write the government problem and prove that the government choice satisfies "tax smoothing", i.e. τ*1 = τ*2.
(c) Explain the intuition for your result.
Analyze the descriptions of generations from traditionalists
: Analyze the descriptions of generations from traditionalists to Generation. Analyze the two news events published within the past 12 months.
|
Check the track airlines are liable or not
: Munz, a paraplegic, was being flown from Houston, Texas, to a clinic in Rochester, Minnesota, for treatment. As Track Airlines personnel were carrying.
|
How do solo parents in stokes valley perceive home ownership
: How do solo parents in Stokes Valley perceive home ownership?What is the purpose of the project?What type of participant are we looking for?
|
How the civil rights movement
: Explain how the Civil Rights movement is connected by ideas and organizations to the history of African American activism since the Civil War.
|
Write household problem and determine optimal consumption
: Consider a two-period economy, where households have preferWrite the household problem and determine optimal consumption {c*1, c*2} as a function of {y, t1, t2}
|
Can universal be held criminally liable for frost action
: Frost was hired by Universal Homes as an agent to sell new homes. During an argument with a customer, Frost struck him and was arrested and convicted.
|
How would you describe policy analysis
: How would you describe policy analysis? How do your perceptions compare to the definitions in the readings? What are 2-3 examples of criminal justice policies?
|
Is world wide correct
: Grabin purchased a cruise from World Wide Travel. The cruise was interrupted because of a faulty generator. Grabin asked for a refund from World Wide.
|
Life come to dislike and oppose the vietnam war
: Why did so many Americans from so many walks of life come to dislike and oppose the Vietnam War? (Give at least two reasons).
|