Optimal Fiscal Policy with Recursive Preferences
研究了宏观金融中常用的递归效用偏好如何改变最优财政政策设计，发现标准税收平滑原则被大幅修正，政策应更多利用债务回报作为财政缓冲，实际财政政策比预想的更差。
I study the implications of recursive utility, a popular preference specification in macro-finance, for the design of optimal fiscal policy. Standard Ramsey tax-smoothing prescriptions are substantially altered. The planner over-insures by taxing less in bad times and more in good times, mitigating the effects of shocks. At the intertemporal margin, there is a novel incentive for introducing distortions that can lead to an ex-ante capital subsidy. Overall, optimal policy calls for a much stronger use of debt returns as a fiscal absorber, leading to the conclusion that actual fiscal policy is even worse than we thought.