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Can taxes stabilize the economy in the presence of consumption externalities?

Lloyd-Braga, Teresa; Modesto, Leonor - 2012

Considering a finance constrained economy, we discuss the stabilization role of variable labour and capital income taxes under a balanced-budget rule in the presence of consumption externalities of the keeping up with the Joneses type. We find that sufficiently procyclical labor and/or capital...

Persistent link: https://www.econbiz.de/10010289988

Intra-Industry Trade, Involuntary Unemployment and Macroeconomic Stability

Le Riche, Antoine; Lloyd-Braga, Teresa; Modesto, Leonor - 2021

indeterminate. After opening the borders, the rigid wage country may export indeterminacy to the full employment country …, particularly if it is big enough. In contrast, when the full employment country is sufficiently big, local indeterminacy, and … fluctuations (associated with local indeterminacy and bifurcations) are possible with smaller externalities, whatever the relative …

Persistent link: https://www.econbiz.de/10012497948

Market distortions and local indeterminacy: A general approach

Lloyd-Braga, Teresa; Modesto, Leonor; Seegmuller, Thomas - 2011

We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations … classes of distortions responsible for indeterminacy. Our methodology consists in introducing general specifications for the … distortions influence the range of values for the elasticity of inputs substitution under which local indeterminacy and …

Persistent link: https://www.econbiz.de/10010278392

Market Distortions and Local Indeterminacy: A General Approach

Lloyd-Braga, Teresa; Modesto, Leonor; Seegmuller, Thomas - Institute for the Study of Labor (IZA) - 2011

Persistent link: https://www.econbiz.de/10008922965

Macroeconomic Effects of the Anticipation and Implementation of Tax Changes in Germany: Evidence from a Narrative Account

Christofzik, Désirée I.; Fuest, Angela; Jessen, Robin - 2024

This paper quantifies the dynamic macroeconomic effects of tax changes in Germany, allowing for anticipation effects of preannounced tax reforms. Identification is achieved using a narrative approach, which provides information about the timing of tax reforms. An anticipated cut in taxes has a...

Persistent link: https://www.econbiz.de/10015210927

Does Short-Time Work Save Jobs? A Business Cycle Analysis

Balleer, Almut; Gehrke, Britta; Lechthaler, Wolfgang; … - 2013

In the Great Recession most OECD countries used short-time work (publicly subsidized working time reductions) to counteract a steep increase in unemployment. We show that short-time work can actually save jobs. However, there is an important distinction to be made: While the rule-based component...

Persistent link: https://www.econbiz.de/10010319488

Fiscal policy and the labour market: The effect of public sector employment and wages

Gomes, Pedro - 2010

I build a dynamic stochastic general equilibrium model with search and matching frictions and two sectors in order to study the labour market effects of public sector employment and wages. Public sector wages plays an important role in achieving the efficient allocation. High wages induce too...

Persistent link: https://www.econbiz.de/10010331074

Government Deficit Shocks and Okun's Coefficient Volatility: New Insights on the Austerity versus Growth Debate

Pham, Binh Thai; Sala, Hector - 2019

This paper connects two salient economic features: (i) Fiscal shocks have asymmetric effects across business cycle phases (Gechert et al., 2019); (ii) Okun's coefficient is time varying and may be unstable. The intertwined dynamic behavior of fiscal shocks and unemployment-output trade-offs are...

Persistent link: https://www.econbiz.de/10012141129

Federal Unemployment Reinsurance and Local Labor-Market Policies

Ignaszak, Marek; Jung, Philip; Kuester, Keith - 2020

Consider a union of atomistic member states, each faced with idiosyncratic business-cycle shocks. Private cross-border risk-sharing is limited, giving a role to a federal unemployment-based transfer scheme. Member states control local labor-market policies, giving rise to a trade-off between...

Persistent link: https://www.econbiz.de/10012497787

Fiscal Multipliers in the COVID-19 Recession

Auerbach, Alan; Gorodnichenko, Yuriy; McCrory, Peter B.; … - 2021

In response to the record-breaking COVID19 recession, many governments have adopted unprecedented fiscal stimuli. While countercyclical fiscal policy is effective in fighting conventional recessions, little is known about the effectiveness of fiscal policy in the current environment with...

Persistent link: https://www.econbiz.de/10012882459