Creator: Aiyagari, S. Rao Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 424 Keyword: Federal government, Taxes , Tax rates, Deficit, Budget management, Tax, Tax policy, and Taxation Subject (JEL): H21 - Taxation and Subsidies: Efficiency; Optimal Taxation and H62 - National Deficit; Surplus
Creator: Miller, Preston J. and Todd, Richard M. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 494 Abstract:
This paper investigates the macroeconomic and welfare effects of a particular public finance decision. That decision was to use debt rather than current taxation to finance deposit insurance payments related to the savings and loan debacle. We find that this decision could have significantly raised real interest rates and affected welfare. The analysis is conducted in a dynamic, open-economy, monetary general equilibrium model in which parameters are set based on empirical observations.
Keyword: S & L, Public finance, Real interest rates, Welfare, Deposit insurance, Taxation, Government debt, and Savings and loan Subject (JEL): G21 - Banks; Depository Institutions; Micro Finance Institutions; Mortgages and H63 - National Debt; Debt Management; Sovereign Debt
Creator: Braun, R. Anton Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 506 Abstract:
This paper investigates the macroeconomic effects of cyclical fluctuations in marginal tax rates. It finds that systematically including tax variables in a standard real business cycle model substantially improves the model's ability to reproduce basic facts about postwar U.S. business cycle fluctuations. In particular, modeling fluctuations in personal and corporate income tax rates increases the model's predicted relative variability of hours and decreases its predicted correlation between hours and average productivity. Fluctuations in tax rates produce large substitution effects that alter the leisure/labor supply decision.
Keyword: Business cycle, Real business cycle model, Taxation, Productivity, Tax, Corporate tax , Income tax, Tax rates, and Taxes Subject (JEL): E32 - Business Fluctuations; Cycles, H24 - Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes, and H25 - Business Taxes and Subsidies including sales and value-added (VAT)