This paper uses REMS, a Rational Expectations Model of the Spanish economy designed by Boscá et al (2007), to analyse the effects of lowering the overall tax wedge to the level prevailing in the US. Our results partially confirm previous findings in the literature: a reduction in the overall...

This paper uses REMS, a Rational Expectations Model of the Spanish economy designed by Bosca et al (2007) to analyse the effects of lowering the overall tax edge to the level prevailing in the US. Our results partially confirm previous findings in the literature: a reduction in the overall tax...

We develop a growth model with unemployment due to imperfections in the labor market. In this model, wage inertia and balanced budget rules cause a complementarity between capital and employment capable of explaining the existence of multiple equilibrium paths. Hysteresis is viewed as the result...

Using the Panel Survey of Income Dynamics, we identify six household types as a function of their balance sheet composition. Since 1999, there has been a decline in the share of patient households and an increase in the share of impatient households with negative wealth. Using a DSGE model with...