Now I am constructing a model solve the Ramsey problem with pure fiscal polices: taxation and debt. And I use the command ramsey_policy, yet the optimal capital income tax rate at the steady state is different from zero, which is contradictionary to what is well known. So I ask for an example of pure optimal fiscal policy by using Dynare. So far what I can find with the command ramsey_policy are all about monetary policies or monetary and fiscal policies.
Fiscal policy involves the government changing the levels of taxation and government spending in order to influence Aggregate Demand and the level of economic activity. a government may institute higher taxes resulting in lower levels of disposable income. Likewise, a government might engage in public spending in order to increase an economy’s cash flow during times of recession. The greatest example of this approach is the Great Depression era ‘New Deal.’
I know this is an old post but it interests me.
It seems to me that the link posted is not quite related to the optimal fiscal policy question (I might be wrong here)
Could anyone point me or share an example of optimal fiscal policy?