Optimal taxation and debt with uninsurable risks to human capital accumulation

Piero Gottardi, Atsushi Kajii and Tomoyuki Nakajima

No ECO2014/08, Economics Working Papers from European University Institute

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..

Keywords: Ramsey equilibrium; Optimal taxation; Incomplete markets; Optimal public debt (search for similar items in EconPapers)
JEL-codes: D52 D60 D90 E20 E62 H21 O40 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-dge, nep-hrm, nep-mac and nep-pbe
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Optimal Taxation and Debt with Uninsurable Risks to Human Capital Accumulation (2015)
Working Paper: Optimal taxation and debt with uninsurable risks to human capital accumulation (2015)
Working Paper: Optimal taxation and debt with uninsurable risks to human capital accumulation (2014)
Working Paper: Optimal taxation and debt with uninsurable risks to human capital accumulation (2014)
Working Paper: Optimal taxation and debt with uninsurable risks to human capital accumulation (2014)
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