The unfunded social security has long been criticized for reducing capital stock and social welfare. In this paper, we study the aggregate and welfare effects of reforms that make social security tax (SST) age dependent. We characterize the optimal age-dependent SST schedule that maximizes...

This paper studies the optimal top marginal income tax rate in a quantitative framework with entrepreneurial choice, financing constraints, and realistic earnings and wealth distributions. I find that the revenue-maximizing top tax rate is approximately 41 percent — close to the recent levels...

Models with entrepreneurship can reproduce high wealth concentration in the top. The key assumption is borrowing constraint, that is, households are unable to borrow enough assets to start a business or to invest to the optimal amount in the business. More recent evidence, however, shows that...

This study examines how micro- and macro-prudential policies work and interact with each other over the credit cycles using a dynamic general equilibrium model of financial intermediaries. Micro-prudential policies restrict the excess risk-taking of individual institutions, while taking real...

This study examines the impact of strengthening bank capital supervision on bank behavior in the incomplete and complete enforcement of regulations. In a dynamic model of banks facing idiosyncratic shocks, banks accumulate regulatory capital and decrease charter value and lending in the short...

This study examines the impact of strengthening bank capital supervision on bank behavior in the incomplete enforcement of regulations. In a dynamic model of banks facing persistent idiosyncratic shocks, banks accumulate regulatory capital and decrease charter value and lending in the short run,...

This study examines the impact of strengthening bank capital supervision on bank behavior in the incomplete and complete enforcement of regulations. In a dynamic model of banks facing idiosyncratic shocks, banks accumulate regulatory capital and decrease charter value and lending in the short...