A reduction in income tax rates generates substantial dynamic responses within the framework of the standard neoclassical growth model. The short-run revenue loss after an income tax cut is partly - or, depending on parameter values, even completely - offset by growth in the long-run, due to the...

A reduction in capital tax rates generates substantial dynamic responses within the framework of the standard neoclassical growth model. The short-run revenue loss after a tax cut is partly — or, depending on parameter values, even completely — offset by growth in the long-run, due to the...

Die traditionell betriebene Konjunkturtheorie versucht aggregierte Schwankungen der wirtschaftlichen Aktivität unter der Prämisse vollkommener Kapitalmärkte zu erklären. Die Rolle von Kapitalmarktunvollkommenheiten bleibt in solchen Modellen unberücksichtigt. An diesem Theoriedefizit setzt...

We propose a new numerical method to solve stochastic models that combines the parameterized expectations (PEA) and the Smolyak algorithms. This method is especially convenient to address problems with occasionally binding constraints (a feature inherited from PEA) and/or a large number of state...

A reduction in income tax rates generates substantial dynamic responses within the framework of the standard neoclassical growth model. The short-run revenue loss after an income tax cut is partly - or, depending on parameter values, even completely - offset by growth in the long-run, due to the...

We propose a new numerical method to solve stochastic models that combines the parameterized expectations (PEA) and the Smolyak algorithms. This method is especially convenient to address problems with occasionally binding constraints (a feature inherited from PEA) and/or a large number of state...

The paper presents the optimal control theory and the maximum principle technique that is suitable for solving dynamic optimalization problems in continuous time. Modern mainstream macroeconomics stresses microeconomics principles of solved problems. However, the application of the standard...

This paper uses panel data and Euler equations to estimate preference specifications that are nonseparable in consumption and leisure. The econometric analysis uses panel data, and therefore it differs from existing econometric studies that use a representative agent framework. Moreover, the...

In this paper we develop a new general methodology for computing the optimal, welfare maximizing social planner's policies for economies with heterogeneous agents in which the stationary distribution of agents is a part of the optimization problem. Previous models analyzing the effects of...