Abstract
This appendix presents proofs for some of the statements in Chap. 2 “Environment and Equilibrium.”
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Notes
- 1.
This is a much less comprehensive statement than that of Chari and Kehoe (1990) or Chang (1998), who demonstrate the sustainability of the entire sequence of policies in the presence and absence of Markovian equilibria. Since we focus on the steady state of the economy, only the steady state of the policy sequence is considered here. In principle, using the same arguments as in Chari and Kehoe (1990), we can show that the entire open–loop equilibrium sequence is sustainable, and the steady state is a special case.
- 2.
Therefore, the old consume the after-tax interest payment, i.e., \({C}_{t}^{t-1} = {K}_{t}\tilde{{R}}_{t},\forall t = 1, 2,\ldots \).
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Lee, A.J. (2012). Appendix A. In: Taxation, Growth and Fiscal Institutions. SpringerBriefs in Business, vol 5. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-1290-8_6
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DOI: https://doi.org/10.1007/978-1-4614-1290-8_6
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