Explain this result intuitively. [Hint: Analyze a representative vintage's generational account.] Tax smoothing and deficits la Barro (1979). Consider a small, open representative- consumer economy with an infinite-horizon (on the lines of Chapter 2). The subjec- tive time preference factor satisfies 8 = 1/(1+r). Suppose that the output of the economy is not Y,, but Y, aT/2, where T, represents taxes.