In this paper I quantify the value of conscription as a state-contingent capital levy in the face of stochastic war-and-peace shocks. I construct a model in which the Ramsey planner is subject to a restricted set of fiscal instruments, characterize optimal policy and the role of conscription,...

We present a tractable model of state-dependent pricing and study the incentive for firms to adjust their price in response to shocks. We find a distinct asymmetry in this response. Positive shocks generate greater price flexibility (and smaller output effects) than negative shocks of the same...