Skip to main content
Duke University Libraries
DukeSpace Scholarship by Duke Authors
  • Login
  • Ask
  • Menu
  • Login
  • Ask a Librarian
  • Search & Find
  • Using the Library
  • Research Support
  • Course Support
  • Libraries
  • About
View Item 
  •   DukeSpace
  • Duke Scholarly Works
  • Research and Writings
  • View Item
  •   DukeSpace
  • Duke Scholarly Works
  • Research and Writings
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Optimal Policy with General Signal Extraction

Thumbnail
View / Download
570.6 Kb
Date
2016-09-26
Authors
Hauk, E
Lanteri, A
Marcet, A
Repository Usage Stats
146
views
202
downloads
Abstract
This paper studies optimal policy with partial information in a general setup where observed signals are endogenous to policy. In this case, signal extraction about the state of the economy cannot be separated from the determination of the optimal policy. We derive a non-standard first order condition of optimality from first principles and we use it to find numerical solutions. We show how previous results based on linear methods, where separation or certainty equivalence obtains, arise as special cases. We use as an example a model of fiscal policy and show that optimal taxes are often a very non-linear function of observed hours, calling for tax smoothing in normal times, but for a strong fiscal reaction to output when a recession is quite certain and the economy is near the top of the Laffer curve or near a debt limit.
Type
Journal article
Permalink
https://hdl.handle.net/10161/13187
Collections
  • Research and Writings
More Info
Show full item record

Scholars@Duke

Lanteri

Andrea Lanteri

Associate Professor of Economics

Material is made available in this collection at the direction of authors according to their understanding of their rights in that material. You may download and use these materials in any manner not prohibited by copyright or other applicable law.

Rights for Collection: Research and Writings


Works are deposited here by their authors, and represent their research and opinions, not that of Duke University. Some materials and descriptions may include offensive content. More info

Make Your Work Available Here

How to Deposit

Browse

All of DukeSpaceCommunities & CollectionsAuthorsTitlesTypesBy Issue DateDepartmentsAffiliations of Duke Author(s)SubjectsBy Submit DateThis CollectionAuthorsTitlesTypesBy Issue DateDepartmentsAffiliations of Duke Author(s)SubjectsBy Submit Date

My Account

LoginRegister

Statistics

View Usage Statistics
Duke University Libraries

Contact Us

411 Chapel Drive
Durham, NC 27708
(919) 660-5870
Perkins Library Service Desk

Digital Repositories at Duke

  • Report a problem with the repositories
  • About digital repositories at Duke
  • Accessibility Policy
  • Deaccession and DMCA Takedown Policy

TwitterFacebookYouTubeFlickrInstagramBlogs

Sign Up for Our Newsletter
  • Re-use & Attribution / Privacy
  • Harmful Language Statement
  • Support the Libraries
Duke University