Stefania Albanesi, Columbia University
EIEF Short PhD Course on
Intertemporal Distortions in Dynamic
Constrained-Efficient Economies, November 2009
Description: This course reviews the literature on
optimal capital income taxation. We will Þrst discuss
the seminal Òzero capital income tax in the long runÓ result that obtains under
the Ramsey approach to optimal policies. We will then move to more general constrained-efficient
economies and examine the conditions under which it is still optimal to abstain
from capital income taxes in the long run and what is different in economies
in which this result does not hold. The class discussion will concentrate on the
main Þndings in this literature and their economic
rationale, as well as the resulting implications for optimal policies. The
presentation will rely on simpliÞed examples that
illustrate general principles. Formal proofs will mostly be left for further
reading. Working knowledge of dynamic optimization, including both sequence
methods and dynamic programming is required.
Slides
Lecture 1 November 11, 2009
Lecture 2 November 25, 2009
Handouts
Wedges and Taxes with Private Information
Assignment
Last
updated 11/25/2009