Pogorelec, Sabina (contributor) - 2006
the labor income tax,
¡
1−τ
L
t
¢
³
W
N,t
L
j
N,t
+W
X,t
L
j
X,t
´
. The home household
j holds domestic money, M
j
t …
≡E
t
∞
X
i=0
β
i
A
C,t
³
C
j
t+i
´
1−σ
1−σ
+
³
G
j
t+i
´
1−σ
g
1−σ
g
+χ
µ
M
j
t+i
P
t+i
¶
1−φ
1−φ
−A
L,t
³
L
j …
t+i
´
1+ψ
1+ψ
, (1)
where the labor supply equalsL
t
= L
N,t
+L
X,t
, and labor is homogenous and perfectly …