The empirical effectiveness of economic policies that operate theoretically through similar channels differs substantially. We document this fact by comparing an easy-to-grasp expectations-based policy, unconventional fiscal policy, with a policy whose implications are harder to understand by...

The paper examines changes in the Bulgarian economy following the global financial and economic crisis of 2008. The discussion is primarily based on the behavior of economic agents in the crisis – households and companies. The paper also seeks to address the changes in the external and fiscal...

We consider a carbon emissions tax announced today, but implemented after a known time-lag. Before implementation, the announcement induces higher emissions than without intervention. In welfare terms, this adverse announcement effect could more than outweigh the gain after tax implementation....

This paper examines how households adjusted their consumption behavior in response to COVID-19 infection risk during the early phase of the pandemic. We use a monthly consumption survey specifically designed by the German Statistical Office covering the second wave of COVID-19 infections from...

The interest rate at which US firms borrow funds has two features: (i) it moves in a countercyclical fashion and (ii) it is an inverted leading indicator of real economic activity: low interest rates today forecast future booms in GDP, consumption, investment, and employment. We show that a...

From 2011 to 2014, the Brazilian government conducted a heavily advertised major credit expansion program through government banks as part of its effort to stimulate the economy. Using administrative data on individual-level borrowing and spending, we find that the program led to a substantial...

The decline in VAT revenue during the Covid-19 recession has been unexpectedly lower than the drop in household consumption. In the first half of 2021, VAT bounced back to pre-crisis levels even though aggregate consumption had still not recovered. According to our analysis, this result...

Corporate tax cuts as well as multiple rounds of quantitative easing, while popular tools for stimulating the economy, have no effect on the profit maximizing condition, marginal revenue (MR) = marginal cost (MC), and could prove ineffectual as firms use the tax cuts, not to increase output, but...

This paper models the macroeconomic and distributional consequences of lockdown shocks during the COVID-19 pandemic. The model features heterogeneous life-cycle households, labor market search and matching frictions, and multiple industries of employment. We calibrate the model to data from New...

Cyclical inequality and idiosyncratic risk imply additional channels that amplify the transmission of persistent balance-sheet policies, through their effects on private sector's expectations and consumption risk. Through these channels, unconventional monetary policy improves the central bank's...