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Sequential equilibria in a Ramsey tax model


Abstract: This paper presents a full characterization of the equilibrium value set of a Ramsey tax model. More generally, it develops a dynamic programming method for a class of policy games between the government and a continuum of consumers. By selectively incorporating Euler conditions into a strategic dynamic programming framework, we wed two technologies that are usually considered competing alternatives, resulting in a dramatic simplification of the problem.

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Provider: Federal Reserve Bank of Minneapolis

Part of Series: Staff Report

Publication Date: 1999

Number: 258