Risk-Taking and Optimal Taxation with Nontradable Human Capital
Title | Risk-Taking and Optimal Taxation with Nontradable Human Capital PDF eBook |
Author | Zuliu Hu |
Publisher | International Monetary Fund |
Total Pages | 22 |
Release | 1992-12-01 |
Genre | Business & Economics |
ISBN | 1451947429 |
What are the effects of taxation on individual/entrepreneurs’ risk-taking behavior? This paper re-examines this old question in a continuous time life-cycle model. We demonstrate that the stream of uncertain income from human capital has systematic effects on demand for the risky physical capital asset. If labor supply is inelastic and real wages are known with certainty, then a labor income tax will reduce holdings of the risky physical asset. However, if there are random fluctuations in labor income, then the effect depends on the nature of interaction between wage risk and investment income risk. A labor income tax may actually raise demand for the risky capital asset if human capital risk and physical capital risk are positively correlated. The idiosyncratic risk and nontradability of human capital also have implications for optimal taxation. When the insurance and disincentive effects are jointly taken into account, a Pareto efficient tax structure implies a strictly positive tax rate.
Optimal Taxation with Risky Human Capital
Title | Optimal Taxation with Risky Human Capital PDF eBook |
Author | |
Publisher | |
Total Pages | |
Release | 2015 |
Genre | |
ISBN | 9788073443580 |
IMF Staff papers
Title | IMF Staff papers PDF eBook |
Author | International Monetary Fund. Research Dept. |
Publisher | International Monetary Fund |
Total Pages | 236 |
Release | 1993-01-01 |
Genre | Business & Economics |
ISBN | 145197325X |
This paper assesses alternative auction techniques for pricing and allocating various financial instruments, such as government securities, central bank refinance credit, and foreign exchange. Before recommending appropriate formats for auctioning these items, the paper discusses basic auction formats, assessing the advantages and disadvantages of each, based on the existing, mostly theoretical, literature. It is noted that auction techniques can be usefully employed for a broad range of items and that their application is of particular relevance to the impetus in many parts of the world toward establishing market-oriented economies.
IMF Working Paper
Title | IMF Working Paper PDF eBook |
Author | |
Publisher | |
Total Pages | 490 |
Release | 1993 |
Genre | Finance |
ISBN |
Journal of Economic Literature
Title | Journal of Economic Literature PDF eBook |
Author | |
Publisher | |
Total Pages | 1164 |
Release | 1994 |
Genre | Economics |
ISBN |
Bibliographie der Wirtschaftswissenschaften
Title | Bibliographie der Wirtschaftswissenschaften PDF eBook |
Author | |
Publisher | |
Total Pages | 1046 |
Release | 1997 |
Genre | Economics |
ISBN |
STAFF PAPERS
Title | STAFF PAPERS PDF eBook |
Author | MARGARET R. KELLY, IAN S. McDONALD, ROZLYN COLEMAN AND SARA KANE |
Publisher | |
Total Pages | 510 |
Release | 1993 |
Genre | |
ISBN |