The Perils of Tax Smoothing: Sustainable Fiscal Policy with Random Shocks to Permanent Output
If permanent output is uncertain, tax smoothing can be perilous: both debt levels and tax rates are difficult to stabilize and may drift upwards. One practical remedy would be to target the debt. However, our simulations confirm that such a policy would require undesirably volatile fiscal adjustment...
| Main Authors: | , |
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| Language: | EN |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10986/4975 |