We show that New Keynesian models with frictionless labor supply face a challenge: given standard parameters, they cannot simultaneously match plausible estimates of marginal propensities to consume (MPCs), marginal propensities to earn (MPEs), and fiscal multipliers. A HANK model with sticky...

This paper seeks to clarify the extent to which the rule for providing public goods ought to correct for the distortionary cost of raising funds. We argue that, in evaluating public projects, the marginal cost of funds (MCF) concept must be supplemented by a symmetrical concept, which we label...

Marginal outcome tests compare the expected effects of a decision on individuals who are of different races but at the same indifference point of the decision-maker. I present a simple formalization of how such tests can detect racial bias, defined as a deviation from accurate statistical...

Marginal outcome tests compare the expected effects of a decision on individuals who are of different races but at the same indifference point of the decision-maker. I present a simple formalization of how such tests can detect racial bias, defined as a deviation from accurate statistical...

Recent debates about the optimal form of social protection programs have highlighted the potential for cash as the preferred form of transfer to low income households. However, in-kind transfers remain prevalent throughout the world. We argue that beneficiaries themselves may prefer in-kind...

The paper shows that a comparison of the appropriately-weighted sum of households' marginal willingness to pay for a public good with the net effect of the increased supply of the public good on shadow, as distinct from actual, government revenue is a generally valid rule for public good...