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Uncertainty and the Theory of Tax Incidence in a Stock Market Economy

Baron, David P. and Forsythe, Robert (1981) Uncertainty and the Theory of Tax Incidence in a Stock Market Economy. International Economic Review, 22 (3). pp. 567-576. ISSN 0020-6598. https://resolver.caltech.edu/CaltechAUTHORS:20171018-153852235

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Abstract

[Introduction] Commencing with Harberger's [1962] classic paper, a number of studies have analyzed the incidence of taxation in the context of a deterministic, two-sector, two-factor general equilibrium model. Recently, R. N. Batra [1975] and R. A. Ratti and P. Shome [1977a, 1977b] have reexamined the robustness of these deterministic results for the case in which production uncertainty is incorporated into the model. By using "entrepreneurial" models in which the firm is assumed to maximize the expected utility of profits, they find that the incidence of taxes depends on the preferences and probability assessments of the entrepreneur, and in general, the deterministic results no longer obtain.


Item Type:Article
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http://www.jstor.org/stable/2526158JSTORArticle
http://resolver.caltech.edu/CaltechAUTHORS:20171017-153114575Related ItemSocial Science Working Paper 259
Additional Information:Manuscript received September 4, 1979; revised March 31, 1981. The first author's work has been supported by NSF Grant #SOC 77-07251. We wish to thank Frank Milne and Assaf Razin for their helpful comments on earlier versions of this paper.
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NSFSOC 77-07251
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Record Number:CaltechAUTHORS:20171018-153852235
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20171018-153852235
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Deposited By: Katherine Johnson
Deposited On:18 Oct 2017 22:44
Last Modified:03 Oct 2019 18:54

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