This paper estimates the effects of changes in marginal tax rates on reported income for different income groups in the postwar US. A large public finance literature focuses on net-of-tax rate elasticities of reported income because it is indicative of the distortionary effects of taxation....

We study a heterogeneous agents model which combines matching frictions in the labor market with incomplete asset markets and nominal rigidities. Workers can experience job terminations that send them into short term unemployment or more serious job terminations that require a more difficult...