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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

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/10010436521

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

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

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/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

Market distortions and local indeterminacy: A general approach

Lloyd-Braga, Teresa; Modesto, Leonor; Seegmuller, Thomas - 2011

We provide a methodology to study the role of market distortions on the emergence of indeterminacy and bifurcations … classes of distortions responsible for indeterminacy. Our methodology consists in introducing general specifications for the … distortions influence the range of values for the elasticity of inputs substitution under which local indeterminacy and …

Persistent link: https://www.econbiz.de/10010278392

The optimal inflation rate and firm-level productivity growth

Weber, Henning - 2012

Empirical data show that firms tend to improve their ranking in the productivity distribution over time. A stickyprice model with firm-level productivity growth fits this data and predicts that the optimal long-run inflation rate is positive and between 1.5% and 2% per year. In contrast, the...

Persistent link: https://www.econbiz.de/10010286841

Labour market and fiscal policy

Charpe, Matthieu; Bridji, Slim - 2012

This paper discusses fiscal policy using a DSGE model with search and matching in the labour market. Fiscal policy is effective mainly via its impact through the labour market. Although public intervention tends to crowd out private consumption, public spending also improves the matching between...

Persistent link: https://www.econbiz.de/10010316798

Rent-seeking competition from State coffers : a calibrated DSGE model of the Euro area

Angelopoulos, Konstantinos; Philippopoulos, Apostolis; … - 2006

This paper incorporates an uncoordinated struggle for extra fiscal favors into an otherwise standard Dynamic Stochastic General Equilibrium model. This reflects the popular belief that interest groups compete for privileged transfers and tax treatment at the expense of the general public...

Persistent link: https://www.econbiz.de/10010261402

Explaining output volatility : the case of taxation

Posch, Olaf - 2009

This paper presents empirical evidence against the popular perception that macro volatility is exogenous. We obtain tax effects on macro aggregates in the stochastic neoclassical model. Taxes are shown to affect the second moment of output growth rates without affecting the first moment....

Persistent link: https://www.econbiz.de/10010267049