It is well known that pay-as-you-go retirement programs reduce steady-state welfare and the capital stock in dynamically efficient OLG economies. The common two-period OLG model obscures, however, the dependence of these effects on the ages at which taxes are paid and benefits are received....

This volume is an invaluable guide for policymakers facing important decisions about environmental taxation, marginal tax rates, dividend taxation, and the taxation of business investment.

We present a model of optimizing government behavior in which a need for increased revenue leads to the introduction of a new revenue source, such as a VAT, accompanied by a reduction in income taxes. We argue that this is a plausible outcome for the United States, in view of international...

Viard observes that fiscal stimulus to aggregate demand must be properly timed because stimulus 'borrows' output and jobs from the future rather than creating them from thin air. He also argues that increases in government purchases do not necessarily provide a larger (correctly measured)...

This article outlines six realities that will likely shape the policy response to the long-run fiscal imbalance. First, defense spending will likely continue trending downward as a share of GDP over the long run because defense needs do not rise proportionately to income, and defense will likely...

We discuss the fiscal implications of a recent proposal to give workers an option to receive a parental leave benefit funded by the Social Security system if they accept an offsetting retirement benefit reduction with the same present discounted value. In principle, the proposal could avoid the...