We document that declining hours worked are the primary driver of widening inequality in the bottom half of the male labor earnings distribution in the United States over the past 52 years. This decline in hours is heavily concentrated in recessions: hours and earnings at the bottom fall sharply...

Combining a variety of survey and administrative data, this paper measures the progressivity of taxes and transfers at the U.S. federal level and separately for each state. The findings are as follows. (i) The federal tax and transfer system is progressive. (ii) State and local tax and transfer...

This paper studies optimal taxation of earnings when the degree of tax progressivity is allowed to vary with age. The setting is an overlapping-generations model that incorporates irreversible skill investment, flexible labor supply, ex-ante heterogeneity in the disutility of work and the cost...

We address this question in a heterogeneous-agent incomplete-markets model featuring exogenous idiosyncratic risk, endogenous skill investment, and flexible labor supply. The tax and transfer schedule is restricted to be log-linear in income, a good description of the US system. Rising...

The US net foreign asset position has deteriorated sharply in the years following the Global Financial Crisis and is currently negative 65 percent of US GDP. This deterioration primarily reflects changes in the relative values of large gross international equity positions, as opposed to net new...

We examine how to quantitatively reconcile the high volatility of market valuations of U.S. corporations with the relative stability of macroeconomic quantities since 1929. Macroeconomic and financial variables are measured in a consistent fashion using the Integrated Macroeconomic Accounts...

We present two valuation models that we use to account for the annual data on price per share and dividends per share for the CRSP Value-Weighted Index from 1929-2023. We show that it is a simple matter to account for these data based purely on a model of variation in the expected ratio of...

We measure the heterogeneous welfare effects of the recent inflation surge across households in the Euro Area. A simple framework illustrating the numerous channels of the transmission mechanism of surprise inflation to household welfare guides our empirical exercise. By combining micro data and...

We provide a quantitative analysis of the trade-offs between health outcomes and the distribution of economic outcomes associated with alternative policy responses to the COVID-19 pandemic. We integrate an expanded SIR model of virus spread into a macroeconomic model with realistic income and...

The current monetary policy framework of the Fed intends to be more 'inclusive' by running the economy hot for longer during expansions. The logic of this strategy rests on Okun's (1973) hypothesis that sustaining a 'high-pressure economy' persistently improves labor market outcomes of low-wage...