Sequential equilibria in a Ramsey tax model

This paper presents a full characterization of the equilibrium value set of a Ramsey tax model. More generally, it develops a dynamic programming meth od for a class of policy games between the government and a continuum of ho useholds. By selectively incorporating Euler conditions into a strategic dy namic programming framework, we wed two technologies that are usually consi dered competing alternatives, resulting in a substantial simplification of the problem.