in The Review of Economic Studies
October 2018; p ublished online January 2018 .
Journal Article. Subjects: Information, Knowledge, and Uncertainy; Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook; Taxation, Subsidies, and Revenue; National Budget, Deficit, and Debt. 16892 words.
I study the implications of recursive utility, a popular preference specification in macro-finance, for the design of optimal fiscal policy. Standard...