This paper examines the net benefit accruing to a government when choosing between a lower tax rate on future profits and an investment subsidy as investment stimulation. We hypothesize that either the firm or the government faces Knightian uncertainty in contemplating investment. In the presence of the firm's Knightian uncertainty, the government prefers the investment cost subsidy to tax rate reduction as the conventional wisdom in prior literature. However, if the government is concerned about the model uncertainty, the optimal policy depends on the varying characteristics in reality, such as the ambiguity level, the growth rate, the volatility, as well as the interest rate environment. The tax rate cut is favorable when the growth rate, the discount rate, and the volatility are lower, and when the ambiguity parameter is higher. By taking into account Knightian uncertainty, we provide a potential rationale behind evaluating stimulus policies in different economic environments.

中文翻译：

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强力刺激民间投资：减税还是投资补贴？

本文研究了政府在未来利润的较低税率和作为投资刺激的投资补贴之间进行选择时产生的净收益。我们假设公司或政府在考虑投资时面临奈特式不确定性。在公司存在奈特不确定性的情况下，政府更喜欢投资成本补贴而不是减税，这是先前文献中的传统智慧。然而，如果政府关心模型的不确定性，那么最优政策取决于现实中的不同特征，例如模糊度、增长率、波动性以及利率环境。当增长率、折现率和波动率较低，以及模糊参数较高时，减税是有利的。