Search Results

SORT BY: PREVIOUS / NEXT
Keywords:Asset liquidity 

Report
A Ramsey Theory of Financial Distortions

The return on government debt is lower than that of asset with similar payoffs. We study optimal debt management and taxation when the government cannot directly redistribute towards the agents in need of liquidity but otherwise has access to a complete set of linear tax instruments. Optimal government debt provision calls for gradually closing the wedge between the returns as much as possible, but tax policy may work as a countervailing force: as long as financial frictions bind, it can be optimal to tax capital even if this magnifies the discrepancy in returns.
Staff Report , Paper 643

FILTER BY Series

FILTER BY Content Type

Report 1 items

FILTER BY Author

FILTER BY Jel Classification

E22 1 items

E44 1 items

E62 1 items

PREVIOUS / NEXT