The U.S. faces exponentially rising entitlement obligations. I introduce a fiscal limit—a point where higher taxes are no longer a feasible financing mechanism—into a Perpetual Youth model to examine how intergenerational redistributions of wealth, the average duration of government debt,...

The U.S. faces exponentially rising entitlement obligations. I introduce a fiscal limit - a point where higher taxes are no longer a feasible financing mechanism - into a Perpetual Youth model to assess how intergenerational redistributions of wealth and the maturity of government debt impact...

Male and female prime-age labor force participation rates have declined in the U.S. at a faster rate than in most developed countries over the past 20 years, even among people with a college degree. Stark differences in health outcomes, incarceration rates, and labor market, maternity and...

Financial institutions, especially in Europe, hold a disproportionate amount of domestic sovereign debt. We examine the extent to which this home bias leads to capital misallocation in a real business cycle model with imperfect information and fiscal stress. We assume banks can hold sovereign...

We investigate the relationship between anchoring and the emergence of bubbles in experimental asset markets. We show that setting a visual anchor at the fundamental value (FV) in the first period only is sufficient to eliminate or to significantly reduce bubbles in laboratory asset markets. If...

This paper contributes to the debate about fiscal multipliers by studying the impacts of government investment in conventional neoclassical growth models. The analysis focuses on two dimensions of fiscal policy that are critical for understanding the effects of government investment:...

Fiscal foresight---the phenomenon that legislative and implementation lags ensure that private agents know the tax rates they face in the future---is intrinsic to the tax policy process. Although acknowledged in empirical work, theoretical analysis of its implications is scant. This paper...

A Bayesian prior predictive analysis is conducted on a suite of models to assess the probability that a model and corresponding prior distributions bias results toward a specific range of fiscal multipliers. We examine a wide range of DSGE models commonly used to estimate fiscal multipliers,...

This study generalizes the nonparametric approach to option pricing of Stutzer, M. (1996) by demonstrating that the canonical valuation methodology introduced therein is one member of the Cressie–Read family of divergence measures. Alhough the limiting distribution of the alternative measures...