General Equilibrium Tax Policy with Hyperbolic Consumers

  title={General Equilibrium Tax Policy with Hyperbolic Consumers},
  author={T. W. Petersen},
  journal={Computational Economics},
Recently David Laibson (1998) and others have argued in favor of usinghyperbolic discount functions. The purpose of this paper is to investigatewhether conventional wisdom, based on the standard model with exponentialdiscounting, also holds in the case where consumers have hyperbolic discountfunctions. In other words to hyperbolic preferences matter for practicalpolicy evaluation?Within the framework of a suitably modified standard General Equilibrium modelà la Auerbach and Kotlikoff (1987… Expand

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