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Sequential Equilibria in a Ramsey Tax Model

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  • Christopher Phelan
  • Ennio Stacchetti

Abstract

This paper presents a full characterization of the equilibrium value set of a Ramsey tax model. More generally, it develops a dynamic programming method for a class of policy games between the government and a continuum of households. By selectively incorporating Euler conditions into a strategic dynamic programming framework, we wed two technologies that are usually considered competing alternatives, resulting in a substantial simplification of the problem. Copyright The Econometric Society.

Suggested Citation

  • Christopher Phelan & Ennio Stacchetti, 2001. "Sequential Equilibria in a Ramsey Tax Model," Econometrica, Econometric Society, vol. 69(6), pages 1491-1518, November.
  • Handle: RePEc:ecm:emetrp:v:69:y:2001:i:6:p:1491-1518
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