Is inflation 'always and everywhere a monetary phenomenon' or is it fundamentally a fiscal phenomenon? The answer hinges crucially on the underlying monetary-fiscal policy regime. Because different regimes imply completely different mechanisms for price level determination and therefore starkly...

Recent years have seen a sustained decline in the labor share around the world. This paper studies this trend by focusing on the effect of corporate income taxes on firm-level labor shares. From 2010 to 2013, the Chinese central government cut the corporate income tax rate in 21 cities for...

Single-equation estimates of fiscal reaction functions, which relate primary surpluses to past debt-GDP ratios and control variables, are subject to potentially serious simultaneity bias that can produce misleading inferences about fiscal behavior. Biases arise from failure to model the general...