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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

Government Spending Shocks and Rule-Of-Thumb Consumers: The Role of Steady State Inequality

Natvik, Gisle James - 2010

redistributed across households in steady state. Inequality leads to equilibrium indeterminacy and undermines the theoretical …

Persistent link: https://www.econbiz.de/10012143748

When the Taylor principle is insufficient: A benchmark for the fiscal theory of the price level in a monetary union

Brede, Maren - 2014

This paper derives restrictions on monetary and fiscal policies for determinate equilibria in a two-country monetary union with autarkic members. It finds that a central bank following the Taylor principle may not be sufficient for determinacy unless accompanied by one 'active' fiscal authority...

Persistent link: https://www.econbiz.de/10010491449

Unemployment and indeterminacy

Nakajima, Tomoyuki - 2003

Using an efficiency-wage model, we examine the relationship between indeterminacy and unemployment insurance. It is … indeterminacy. Our result is based on the fact that the no-shirking condition with marginal utility ofw ealth kept constant is …

Persistent link: https://www.econbiz.de/10010318962

Performance of inflation targeting based on constant interest rate projections

Honkapohja, Seppo; Mitra, Kaushik - 2003

indeterminacy of equilibria and instability under adaptive learning. However, some other forms of CIR policy perform better. We also …

Persistent link: https://www.econbiz.de/10010298248

News versus sunspot shocks in a New Keynesian model

Karnizova, Lilia - 2010

Separately, news and sunspot shocks have been shown empirically to be determinants of changes in expectations. This paper considers both of them together in a simple New Keynesian monetary business cycle model. A full set of rational expectations solutions is derived analytically. The analytical...

Persistent link: https://www.econbiz.de/10010300024

News versus sunspot shocks in a New Keynesian model

Karnizova, Lilia - In: Economics: The Open-Access, Open-Assessment E-Journal 4 (2010) 2010-19, pp. 1-27

Persistent link: https://www.econbiz.de/10010300732

Instability and indeterminacy in a simple search and matching model

Krause, Michael; Lubik, Thomas A. - 2010

We demonstrate the possibility of indeterminacy and non-existence of equilibrium dynamics in a standard business cycle …

Persistent link: https://www.econbiz.de/10010303900

Local home environment externality is a source of indeterminacy

Kuwahara, Shiro; Yamada, Katsunori - 2008

source of indeterminacy. …

Persistent link: https://www.econbiz.de/10010332308

Heterogeneous Expectations, Indeterminacy, and Postwar US Business Cycles

Ilabaca, Francisco; Milani, Fabio - 2020

postwar US macroeconomic data can be explained as the outcome of passive monetary policy, indeterminacy, and sunspot … allowing the parameters to fall both in the determinacy and indeterminacy regions. The estimates reveal large shares of agents … results conﬁrm that macroeconomic data in the early windows are better explained by indeterminacy, while determinacy is …

Persistent link: https://www.econbiz.de/10012207989