We investigate the positive and normative implications of a tax on financial market transactions in a dynamic general equilibrium model, where agents face idiosyncratic liquidity shocks and financial trading is essential. Our main finding is that agents' portfolio choices display a pecuniary...

We provide a novel justification for a financial transaction tax for economies, where agents face stochastic consumption opportunities. A financial transaction tax makes it more costly for agents to readjust their portfolios of liquid and illiquid assets in response to these liquidity shocks,...

The worldwide problem with pay-as-you-go, defined-benefits social security systems is not just financial. Through a dynamic, overlapping-generations model where forming a family and bearing and educating children are choice variables, we show that social security taxes and benefits generate...

Census data from international sources covering 77 percent of the world's migrant population indicate that the skill composition of migrants in major destination countries, including the United States, has been rising over the last four decades. Moreover, the population share of skilled migrants...

Ongoing demographic changes have brought about a substantial shift in the size and age composition of the population, which are having a significant impact on the global economy. Despite potentially grave consequences, demographic changes usually do not take center stage in many macroeconomic...