We use a two-sector neoclassical open economy model with traded and non-traded goods to investigate the effects of unanticipated and anticipated tax reforms. First, an unanticipated tax reform produces an expansion of GDP, labor, and investment, while an anticipated tax reform has opposite...

This paper addresses the role of markup variations in the transmission process of cross-sectoral productivity differential shocks and government spending shocks to the relative price of nontradables. The Balassa-Samuelson model based on frictionless goods markets predicts that a rise in the...

Purpose – The purpose of this paper is to investigate the patterns and determinants of excess labour turnover (churning) in the Luxembourg labour market using a rich employer‐employee matched data set. Design/methodology/approach – The paper formulates a model to explain churning rates...

This paper investigates both the dynamic and steady-state effects of anticipated permanent and temporary terms of trade shocks within a two-good small open economy with habit formation and capital adjustment costs. A permanent terms of trade worsening induces a deficit-surplus current account...