Researchers and state policymakers have hypothesized that the elderly may move to another state to avoid paying “death” (i.e., inheritance, estate, gift) taxes. This belief may be responsible for the recent revolution in state “death” tax policy whereby 30 states have eliminated their...

Households have many economic roles in society. One of such roles is to share household-level public goods that are jointly consumed by members of the household. Several theoretical models have been proposed in the literature: the unitary model, the non-cooperative game theoretical model and the...

Recent research suggests that income redistribution preferences vary across identity groups. We employ a new pattern recognition technology to uncover what these groups are. Using data from the General Social Survey, we present a new stylized fact that preferences for governmental provision of...

This paper analyzes the macroeconomic and welfare effects of population aging and Social Security reform. First, a stochastic overlapping-generations model with heterogeneous agents is carefully extended to an aging society. The model uses the intermediate population projection of the Trustee...

The paper focuses on short run macroeconomic dynamics triggered by demand side shocks. In particular, the paper analyzes, in a general equilibrium framework, the impact of transitory demand side shocks on the behavior of macroeconomic variables and examines the relevance of policy instruments...

This paper studies a simple monetary growth model with debt and deficits to investigate the effects of various polices on output and inflation when the central bank is `tough.' In sharp contrast to the vast literature which implicitly or explicitly assumes fiscal dominance regime, in which the...

This paper studies an international tax policy design problem by employing a two-country dynamic general equilibrium model with incomplete asset markets. We investigate the possibility of welfare-improving active tax policies, in particular capital and labor income tax, under the non-cooperative...

Modern theories of government finance stress the importance of an economy’s fiscal deficits in determining the course of monetary policy. Modern growth theory stresses the role of monetary factors in economic growth. This paper explores how these two are interrelated, using a simple AK...

An understanding of volatility in stock markets is important for determining the cost of capital and for assessing investment and leverage decisions as volatility is synonymous with risk. Substantial changes in volatility of financial markets are capable of having significant negative effects on...

The paper presents a three period model that studies the eects of IMF loans on borrowers’ and lenders’ welfare highlighting the fact that the IMF has both de jure and de facto seniority rights over private creditors. It is shown that an IMF intervention affects borrowers and...