Depreciation rules and value invariance with extractive firms
نویسنده
چکیده
The application of Samuelson's theorem on value invariance to the case of intertemporally optimizing "rms is shown to require a judiciously chosen economic depreciation formula which depends on both current stock and current #ow variables, in order to prevent the "rms from changing their actions in the face of the tax regime. We illustrate by deriving depreciation rules which achieve non-distortingness of actions and value-invariance for resource-extracting "rms. 2002 Elsevier Science B.V. All rights reserved. JEL classixcation: H25; D92
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