A New Approach to Optimal Commodity Taxation

This paper makes a fresh attempt at characterizing optimal commodity taxes. Under the usual assumptions, an extremely simple expression of second-best commodity taxes is derived, showing tax rates as functions of observable variables only, rather than as functions of unobservable variables such as compensated cross elasticities. The main formula is independent of special preferences, and independent of the number of commodities. It has a simple economic meaning and could be particularly useful for empirical research. Examples and remarks on the normalization problem are provided.optimal commodity taxation, Ramsey rule

Notes on the Target2 Dispute

Schulden; Finanzmarktkrise; Target Zone; Schuldenkrise; Europäische Wirtschafts- und Währungsunion

Property taxes and dynamic efficiency: A correction

According to Kim and Lee (1997), property taxes as opposed to capital gain taxes and taxes on rent endanger dynamic efficiency. The present paper shows that the choice of the tax base is immaterial. What counts is whether the taxes eliminate the after-tax rent. Empirical evidence suggests that this is not the case. © 2014 The Author

Investment Timing, Liquidity, and Agency Costs of Debt

This paper examines the effect of debt and liquidity on corporate investment in a continuous- time framework. We show that stockholder-bondholder agency conflicts cause investment thresholds to be U-shaped in leverage and decreasing in liquidity. In the absence of tax effects, we derive the optimal level of liquid funds that eliminates agency costs by implementing the first-best investment policy for a given capital structure. In a second step we generalize the framework by introducing a tax advantage of debt, and we show that an interior solution for liquidity and capital structure optimally trades off tax benefits and agency costs of debtinvestment timing; liquidity; agency costs of debt; capital structure; real options

Critical remarks on Piketty’s Capital in the Twenty-first Century

This article discusses the central macroeconomic claims that are made in Thomas Piketty’s book Capital in the Twenty-first Century. The article aims to show that Piketty’s contentions are not only logically flawed but also contradicted by his own data

Anmerkungen zum Target2-Streit

Zahlungsbilanz, Zahlungsbilanzungleichgewicht, Schulden, Leistungsbilanz, Wettbewerb, Europäische Wirtschafts- und Währungsunion