Paper: fix formulation-A algebra and scope the level-rise invariance to the region-confined convention - #44
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…to the region-confined convention With deductible share delta the untaxed optimum is n(1-delta)^e, not n, so say so and align the ability-recovery statement with the flat-optimum equation (and note the code sets delta = 0 in the anchor). Recast the "every potential crosser optimally stops at the new threshold" paragraph: the region-confined solve clips released firms at the new notch by construction, so the invariance is a property of the maintained status convention, not a computed global-optimum result. Refs #39, #32 (finding 4). Co-Authored-By: Claude Fable 5.1 <noreply@anthropic.com>
This was referenced Sep 3, 2026
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paper/Sections/behavioural.tex; no numbers change.π = (1−δ)(1−τf)y − Candy* = n[(1−δ)(1−τ)]^e, then says "the undistorted optimum is y = n". Withf = 0the same FOC givesn(1−δ)^e;y = nneedsδ = 0. Now stated correctly.n_i = y_obs; consistent with the equation above it should bey_obs/(1−δ_i)^e. Fixed, with a note thatdynamic/model.py::recover_abilitysetsδ = 0in this anchor and that no reform number depends on it (the response ratio cancels bothδandn).forward_solve_iso_batchnever evaluates that discrete choice; it clips firms into the reform region containing their observed turnover. The paragraph now says the invariance follows from the maintained status convention (released firms deregister and are not permitted to re-cross), notes that a released firm above the new marginal buncher would register and remit VAT, and labels the programmatic assertion as conditional.The remaining code-side decisions (ageing convention in
threshold_sweep, optional global check againstn_H(e; T_new)) are in #39.Refs #39, #32 (finding 4).
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