Nick and I argued that Barro's 1979 tax smoothing result is due to his quadratic loss function. We identified what we dubbed a "precautionary taxation" motive when there's a Laffer curve in taxation.
Ken Judd blogs about my 1995 paper with Nick Rowe
Ken Judd blogs about my 1995 paper with Nick…
Ken Judd blogs about my 1995 paper with Nick Rowe
Nick and I argued that Barro's 1979 tax smoothing result is due to his quadratic loss function. We identified what we dubbed a "precautionary taxation" motive when there's a Laffer curve in taxation.