Using a macro-econometric model we provide a quantitative estimate of the cash transfer or tax cut that would achieve recovery from a severe recession when the central bank is unable to achieve full recovery because of the zero bound. We introduce an automatic transfer and simulate its...

This article constructs a transitional protection rule-an “old-wealth deduction†-for conversion of the income tax to a personal consumption tax and tests it in four stylized life cycle economies (identical, pension, bequest, and spender) by performing numerical simulations. It is...

The authors analyze several reasonable policy options for pay-as-you-go Social Security that might be adopted in response to a temporary demographic bulge. The bulge generation enters the economy, works, retires, andexits the economy. Three of the policies maintain a balanced budget. Under the...

Abstract Analysts agree that designing a satisfactory tax rule for owner-occupied housingposes a senous challenge for the personal (cash flow) consumption tax that recently has been introduced in Congress by several senators. We compare tax rules for owner-occupied housing by performing...