Intertemporal distortions in the second best
By: Stefania Albanesi, Roc Armenter
Contributors: Armenter, Roc; National Bureau of Economic Research
Series: NBER working paper series -- working paper 13629; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 13629.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "We consider a very general class of public finance problems that encompasses the Ramsey model of optimal taxation as well as economies with limited commitment, private information, and political economy frictions, and allows for incomplete markets.  We identify a sufficient condition to rule out permanent intertemporal distortions at the optimum.  If there exists an admissible allocation that converges to the first best steady state, then all intertemporal distortions are temporary in the second best.  We analyze a series of applications to illustrate the significance of this result"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 12/7/2007.

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