Unformatted text preview: h x h l =-f z f l It means that it is optimal to set τ z = 0 and not distort production eﬃciency. For more on intermediate good taxation and production eﬃciency see Diamond and Mirrlees ( 1971 ). 11...
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- Fall '10
- Calculus, Intermediate good, Ramsey problem, c1 + g1, FOC w.r.t l1