This essay discusses the policy debate concerning optimal taxation and the distribution of income. It begins with a brief overview of trends in income inequality, the leading hypothesis to explain these trends, and the distribution of the tax burden. It then considers the normative question of...

Many economists favor higher taxes on energy-related products such as gasoline, while the general public is more skeptical. This esay discusses various aspects of this policy debate. It focuses, in particular, on the use of these taxes to correct for various externalities - an idea advocated...

Gender-Based Taxation (GBT) satisfies Ramsey’s rule of optimality because it taxes at a lower rate the more elastic labor supply of women. This holds when different elasticities between men and women are taken as exogenous. We study GBT in a model in which labor supply elasticities emerge...

Theoretical investigations have examined both anti-competitive and efficiency-inducing rationales for vertical bundling, making empirical evidence important to understanding its welfare implications. We use an extensive dataset on full-line forcing contracts between movie distributors and video...

We study which policy tool and at what level would be chosen by majority voting to reduce negative externalities, such as pollution. We consider three instruments: a rule, that sets an upper limit to the polluting activity, a quota that obliges to proportional reduction, and a tax on the...

In this paper we critically review the literature on the political economy of monetary policy, with an eye on the questions raised by the recent financial crisis. We begin with a discussion of rules versus discretion. We then examine the issue of Central Banks independence both in normal times,...

We provide an empirical study of bundling in a supply chain, referred to as full-line forcing. We use an extensive dataset on contracts between video retailers and movie distributors to analyze the choices made on both sides of the market: which distributors offer full-line forcing contracts,...

We study budget formation in a model featuring separation of powers. In our model,the legislature designs a budget bill that can include a cap on total spending and ear-marked allocations to designated public projects. Each project provides random benefits to one of many interest groups. The...

Gender-Based Taxation (GBT) satisfies Ramsey's rule of optimality because it taxes at a lower rate the more elastic labor supply of women. This holds when different elasticities between men and women are taken as exogenous. We study GBT in a model in which labor supply elasticities emerge...

Incomplete product availability is an important feature of many markets; ignoring changes in availability may bias demand estimates. We study a new dataset from a wireless inventory system installed on 54 vending machines to track product availability every four hours. The data allows us to...