Online First Journal of Money, Credit and Banking Online 30 Apr 2026Capital Income Taxation and Self-Fulfilling Aggregate InstabilityKevin X.D. Huang · Qinglai Meng · Jianpo XueThis paper overturns the longstanding consensus established by Schmitt-Grohé and Uribe (1997) that relying on capital income tax adjustments to balance the government budget immunizes the economy …