Article ID Journal Published Year Pages File Type
5059757 Economics Letters 2013 5 Pages PDF
Abstract
Financing government spending through lump sum taxes does not distort capital when markets are complete but tends to increase precautionary savings under market incompleteness. Using flat consumption taxes instead leaves precautionary savings unaffected, provided certain conditions on utility are met.
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Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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Consumption taxes and precautionary savings
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