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Abstract

The author thanks Thomas J. Sargent for introducing him to this research agenda and providing constant encouragement and inspiration. The author is also grateful to Lars Peter Hansen and to the late David K. Backus for comments. An earlier version of this paper was titled "Doubts about the model and optimal taxation." The views expressed here are those of the author and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the author's responsibility.

Prices and Taxes in a Ramsey Climate Policy Model under Heterogeneous Beliefs and Ambiguity

“…This belief regime is related to the robust fiscal policy model in Karantounias (2020). A fifth possible belief regime, wherein the planner has doubts but the private sector trusts the extant model, is not treated here having been widely discussed in the referenced literature.…”