A robust prediction from the tax evasion literature is that optimal auditing induces a regressive bias in e¤ective tax rates compared to statutory rates. If correct, this will have important distributional consequences. Nevertheless, the regressive bias hypothesis has never been tested...

This paper analyses the impact of tax reforms that decrease income tax progression in an equilibrium search model with wage bargaining and endogenous individual working time. The working time is either bargained together with the hourly wage (case 1) or determined solely by workers after...

This paper analyses systematic monetary policy in a dynamic stochastic menu cost model. The main assumptions are that price setters have to pay small adjustment costs in order to equalize actual and optimal prices whereas the central bank can do so costlessly (by adjusting the money supply) but...

This note reconsiders the private losses and welfare effects of a monetary expansion obtained in the seminal Blanchard \& Kiyotaki (1987) article. In the original article it is argued that the welfare ''dependence is a complex one''. Therefore, the authors only present some numerical examples....

New Keynesian literature assumes symmetric industrial structure when analysing explanations of monetary non-neutrality. We analyse the impact of modifying this assumption by allowing for a mixed industrial structure; some industries are characterized by monopolistic competition, and others by...