Steady state taxes in the Ramsey-Cass-Koopmans Growth model

The Ramsey-Cass-Koopmans Growth model allows for taxes on capital, consumption and labor. The steady state values of all of the endogenous variables can be readily computed for each tax rate.

This Mathematica notebook computes these steady states. In addition, it computes the utility levels obtained, with or without the utility of government spending included. Government spending is assumed to affect on decisions. Tax rates do affect decisions. All tax revenue goes to current government spending.

The notebook contains four programs:

• A program called pdg (it computes the values)
• A program called p[x] that graphs things
• A command called besttaxrate that gives the best tax rate on one variable, given the tax rates on the other two. the ta
• A command called maxu that gives the maximum (period) utility, including utility from government spending.

You need a copy of Mathematica to run the programs. Mathematica Notebook, tax exercise