Reinhorn, Leslie (2011) 'Production efficiency and excess supply.', Working Paper. Durham University, Durham.
This paper demonstrates that intermediate goods should not be taxed even in the presence of dividend payments to households, thus clarifying previous results. 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.
|Item Type:||Monograph (Working Paper)|
|Keywords:||Production efficiency, Excess supply, optimal taxation, Non-tight equilibrium, Price supports,. JEL classifcation: H21.|
|Full text:||(VoR) Version of Record|
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|Publisher Web site:||http://www.dur.ac.uk/business/faculty/working-papers/|
|Record Created:||07 Dec 2012 10:36|
|Last Modified:||16 Oct 2013 13:23|
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