Production efficiency and excess supply
This paper demonstrates that intermediate goods should not be taxed even in the presence of dividend payments to households. We also find that optimal government policy in a second best world may include stockpiles of output—private supply exceeds private demand, and the government purchases the surplus. This may provide a possible explanation for some agricultural policies.
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Volume (Year): 65 (2013)
Issue (Month): 2 ()
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References listed on IDEAS
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