Title of article :
Optimal taxationinthepresenceofbailouts
Author/Authors :
Stavros Panageas، نويسنده ,
Issue Information :
روزنامه با شماره پیاپی سال 2010
Abstract :
The terminationofarepresentativefinancialfirmduetoexcessiveleveragemayleadto
substantialbankruptcycosts.Agovernmentinthetraditionof Ramsey(1927) may be
inclinedtoprovidetransferstothefirmsoastopreventitsliquidationandthe
associateddeadweightcosts.Itisshownthattheoptimaltaxationpolicytofinancesuch
transfersexhibitsprocyclicalityandhistorydependence,eveninacompletemarket.
Theseresultsareincontrastwithpre-existingliteratureonoptimalfiscalpolicy,andare
driven bytheendogeneityofthetransferpaymentsthatarerequiredtosalvagethe
financialfirm.
Keywords :
Optimal taxationGuaranteesBailoutsContinuous timeoptimizationmethods
Journal title :
Journal of Monetary Economics
Journal title :
Journal of Monetary Economics
