Using a macro-econometric model we provide a quantitative estimate of the cash transfer or tax cut that would achieve recovery from a severe recession when the central bank is unable to achieve full recovery because of the zero bound. We introduce an automatic transfer and simulate its...

This paper simulates the use of transfers to households plus central-bank open-market purchases to generate a recovery of a low-interest-rate economy from a negative demand shock. Transfers to households are automatically triggered in recession; the prescribed anti-recession transfer ratio is...

Did the 2008 rebate fail to stimulate consumer spending? In their influential <i>American Economic Review</i> articles, John Taylor and Martin Feldstein each claim that Bureau of Economic Analysis (BEA) aggregate time series data show that the 2008 rebate failed. Reexamining the BEA data, we find that...

This article constructs a transitional protection rule-an “old-wealth deduction†-for conversion of the income tax to a personal consumption tax and tests it in four stylized life cycle economies (identical, pension, bequest, and spender) by performing numerical simulations. It is...

It is often assumed that if an income tax is converted to a consumption tax, the resulting change in the capital/labor ratio of the economy depends on the saving elasticity (the response of individual saving to the interest rate). In one standard life-cycle growth model, we show that, though...

This paper studies an application of income-related patient cost-sharing. Using data from the Medicare Current Beneficiary Survey, we find that varying patient costsharing rates with patient income in the Medicare prescription drug program can reduce the severity of two problems: high...