in the long run.

This paper studies optimal taxation in a version of the neoclassical growth model in which investment becomes productive within the period, thereby making the supply of capital elastic in the short run. Because taxing capital is distortionary in the short run, the government׳s ability/desire to...

This paper studies optimal taxation in a version of the neoclassical growth model in which investment becomes productive within the period, thereby making the supply of capital elastic in the short run. Because taxing capital is distortionary in the short run, the government's ability/desire to...

which government infrastructures, which are part of the fiscal policy, are an input into production which firms do not control. We show that if the production of government infrastructures is subject to correlated but less volatile shocks than private production, then a negative productivity...

In the usual version of the neoclassical growth model used to identify neutral (N-Shock) and investment shocks (I-Shock), a linear transformation frontier between consumption and investment goods is assumed. This paper extends the original framework, allowing for curvature in the transformation...

This paper develops a simple life-cycle model that embeds a theory of debt restrictions based on the existence of inalienable property rights à la Kehoe and Levine [1993. Debt constrained asset markets. Review of Economic Studies 60(4), 865–888; 2001. Liquidity constrained markets versus debt...

When young individuals face binding debt constraints, their human capital investments will be insufficiently financed by private creditors. If generations overlap, then a well-designed fiscal policy may be able to improve human capital investments by replacing missing capital markets with an...

We use the US Survey of Consumer Finances to measure the change in federal tax liability that would result should mortgage interest no longer be deductible from taxable income. We argue that the elimination of this housing tax provision would lead households to reshuffle their balance sheet,...