We analyze optimal capital and labor taxes in a model where (i) the government makes noncontingent announcements about future policies and (ii) ex-post statecontingent deviations from these announcements are costly. With Full Commitment, optimal fiscal announcements are unbiased forecasts of...

We characterize the dispersion of firm-level productivity and demand shocks over the business cycle using Swedish microdata including prices and analyse the consequences for firms and the aggregate economy. Demand dispersion increases by more than productivity dispersion in recessions....

We develop a model of capital accumulation in an open economy that imports investment goods from large foreign firms with market power. We model investmentgoods producers as a dynamic oligopoly and characterize a Markov Perfect Equilibrium with a Generalized Euler Equation. We use this...