Ramsey Taxation in the Global Economy

32 Pages Posted: 26 Feb 2018

See all articles by V. Chari

V. Chari

University of Minnesota - Minneapolis

Juan Pablo Nicolini

Universitat Pompeu Fabra

Pedro Teles

Federal Reserve Bank of Chicago; Centre for Economic Policy Research (CEPR)

Date Written: February 2018

Abstract

We study cooperative optimal Ramsey equilibria in the open economy addressing classic policy questions: Should restrictions be placed to free trade and capital mobility? Should capital income be taxed? Should goods be taxed based on origin or destination? What are desirable border adjustments? How can a Ramsey allocation be implemented with residence-based taxes on assets? We characterize optimal wedges and analyze alternative policy implementations.

Keywords: Capital income tax; free trade; value-added taxes; border adjustment; origin- and destination-based taxation; production e

JEL Classification: E60, E61, E62

Suggested Citation

Chari, V. and Nicolini, Juan Pablo and Teles, Pedro, Ramsey Taxation in the Global Economy (February 2018). CEPR Discussion Paper No. DP12753, Available at SSRN: https://ssrn.com/abstract=3130192

V. Chari (Contact Author)

University of Minnesota - Minneapolis

110 Wulling Hall, 86 Pleasant St, S.E.
308 Harvard Street SE
Minneapolis, MN 55455
United States

Juan Pablo Nicolini

Universitat Pompeu Fabra ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain

Pedro Teles

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States
312-322-2947 (Phone)
312-322-2357 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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