Working Paper: CEPR ID: DP12753
Authors: V. V. Chari; Juan Pablo Nicolini; Pedro Teles
Abstract: We study cooperative optimal Ramsey equilibria in the open economy addressing classic policy questions: Should restrictions be placed to free trade and capital mobility? Should capital income be taxed? Should goods be taxed based on origin or destination? What are desirable border adjustments? How can a Ramsey allocation be implemented with residence-based taxes on assets? We characterize optimal wedges and analyze alternative policy implementations.
Keywords: capital income tax; free trade; value-added taxes; border adjustment; origin and destination-based taxation
JEL Codes: E60; E61; E62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Capital income taxation (H24) | production efficiency (D24) |
| Trade restrictions (F14) | welfare (I38) |
| Ramsey allocations (H00) | production efficiency (D24) |
| Consumption and labor income taxes (H31) | capital income taxes (E25) |