Nber working paper series structural and stabilization aspects of fiscal and financial policy in the dependent economywould like to thank Jonathan Eaton for many helpful discussions, especially in connection wih the "first-order " real income effects of changes in a distortionary tax rate, when evaluated at a zero level of the distortion, in the Yaari—Blanchard model of consump
Expenditure composition and distortionary tax for equitable economic growth...continues the study of optimal fiscal policy in a growing economy by exploring a case in which the government simultaneously provides three main categories of expenditures with distortionary tax finance: public production services, public consumption services, and state-contingent redistributive transfers....
Investment ramifications of distortionary tax subsidies... Distortionary tax subsidies encourage firms to concentrate investments in tax-favored assets profitability of investment and reducing payoffs to bondholders in the event of default....
Expenditure composition and distortionary tax for equitable economic growth... This paper continues the study of optimal fiscal policy in a growing economy by exploring a case in which the government simultaneously provides three main categories of expenditures with distortionary tax finance: public production services, public consumption services, and state-contingent redistributive transfers....
