New answers tagged taxation
2
I think your math is mostly correct but I have to admit that I am not used to AK models.
A short answer for your main question: is it ok to introduce taxation in the model without including the government?
Answer: Yes, of course. There are overwhelming literature on dynamic or static theoretical modeling of the effect of tax policy without introducing ...
1
the practices of assigning salaries and bonuses, etc, would be difficult to adjust in the short term (i.e. more inelastic), so they'd tend to stay the same,
This might be true empirically (I am not an expert on CEO compensation), but if you are doing a test you have to follow assumptions in exercise (which will not always be realistic - undergraduate ...
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