Risultati della ricerca
Creator: Wallace, Neil Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 018 Parola chiave: Foreign exchange rates, Capital movements, and Foreign earning asset Soggetto: F31 - Foreign Exchange, E10 - General Aggregative Models: General, E62 - Fiscal Policy, and E22 - Investment; Capital; Intangible Capital; Capacity
Creator: Chari, V. V. and Kehoe, Patrick J. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 125 Abstract:
This paper presents a simple general equilibrium model of optimal taxation similar to that of Lucas and Stokey (1983), except that we let the government default on its debt. As a benchmark, we consider Ramsey equilibria in which the government can precommit its policies at the beginning of time. We then consider sustainable equilibria in which both government and private agent decision rules are required to be sequentially rational. We concentrate on trigger mechanisms which specify reversion to the finite horizon equilibrium after deviations by the government. The main result is that no Ramsey equilibrium with positive debt can be supported by such trigger mechanisms.
Soggetto: E62 - Fiscal Policy and E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
Creator: Supel, Thomas M. Series: Working paper (Federal Reserve Bank of Minneapolis. Research Department) Number: 150 Parola chiave: Rational expectations model, Indexed tax structure, and Federal income tax Soggetto: H21 - Taxation and Subsidies: Efficiency; Optimal Taxation, E62 - Fiscal Policy, and C43 - Index Numbers and Aggregation; Leading indicators
Creator: Aiyagari, S. Rao and Peled, Dan Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 197 Abstract:
It is often argued that with a positively skewed income distribution (median less than mean) majority voting would result in higher tax rates than maximizing average welfare and, hence, lower aggregate savings. We reexamine this view in a capital accumulation model, in which distorting redistributive taxes provide insurance against idiosyncratic shocks and income distributions evolve endogenously. We find small differences of either sign between the tax rates set by a majority voting and a utilitarian government, for reasonable parametric specifications, despite the fact that model simulations produce positively skewed distributions of total income across agents.
Parola chiave: Proportional taxes, Utilitarian government, and Sequential majority voting Soggetto: C68 - Computable General Equilibrium Models, E62 - Fiscal Policy, and H23 - Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Creator: Christiano, Lawrence J. and Harrison, Sharon G. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 214 Abstract:
We study a one-sector growth model which is standard except for the presence of an externality in the production function. The set of competitive equilibria is large. It includes constant equilibria, sunspot equilibria, cyclical and chaotic equilibria, and equilibria with deterministic or stochastic regime switching. The efficient allocation is characterized by constant employment and a constant growth rate. We identify an income tax-subsidy schedule that supports the efficient allocation as the unique equilibrium outcome. That schedule has two properties: (i) it specifies the tax rate to be an increasing function of aggregate employment, and (ii) earnings are subsidized when aggregate employment is at its efficient level. The first feature eliminates inefficient, fluctuating equilibria, while the second induces agents to internalize the externality.
Parola chiave: Business cycle, Regime switching, Stabilization, Fiscal policy, and Multiple equilibria Soggetto: E62 - Fiscal Policy, E32 - Business Fluctuations; Cycles, and E13 - General Aggregative Models: Neoclassical
Creator: McGrattan, Ellen R. and Schmitz, James Andrew Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 250 Abstract:
This chapter reviews the literature that tries to explain the disparity and variation of GDP per worker and GDP per capita across countries and across time. There are many potential explanations for the different patterns of development across countries, including differences in luck, raw materials, geography, preferences, and economic policies. We focus on differences in economic policies and ask to what extent can differences in policies across countries account for the observed variability in income levels and their growth rates. We review estimates for a wide range of policy variables. In many cases, the magnitude of the estimates is under debate. Estimates found by running cross-sectional growth regressions are sensitive to which variables are included as explanatory variables. Estimates found using quantitative theory depend in critical ways on values of parameters and measures of factor inputs for which there is little consensus. In this chapter, we review the ongoing debates of the literature and the progress that has been made thus far.
Parola chiave: Endogenous growth theory, Growth accounting, Cross-country income differences, and Growth regressions Soggetto: O11 - Macroeconomic Analyses of Economic Development, O47 - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence, E62 - Fiscal Policy, E65 - Studies of Particular Policy Episodes, and O41 - One, Two, and Multisector Growth Models
Creator: Chari, V. V. and Kehoe, Patrick J. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 251 Abstract:
We provide an introduction to optimal fiscal and monetary policy using the primal approach to optimal taxation. We use this approach to address how fiscal and monetary policy should be set over the long run and over the business cycle. We find four substantive lessons for policymaking: Capital income taxes should be high initially and then roughly zero; tax rates on labor and consumption should be roughly constant; state-contingent taxes on assets should be used to provide insurance against adverse shocks; and monetary policy should be conducted so as to keep nominal interest rates close to zero. We begin optimal taxation in a static context. We then develop a general framework to analyze optimal fiscal policy. Finally, we analyze optimal monetary policy in three commonly used models of money: a cash-credit economy, a money-in-the-utility-function economy, and a shopping-time economy.
Parola chiave: Capital income taxation, Primal approach, Tax smoothing, Ramsey problems, and Friedman rule Soggetto: E52 - Monetary Policy, E62 - Fiscal Policy, E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General, E50 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General, H21 - Taxation and Subsidies: Efficiency; Optimal Taxation, and H30 - Fiscal Policies and Behavior of Economic Agents: General
Creator: Krueger, Dirk and Perri, Fabrizio Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 262 Abstract:
We explore the welfare consequences of different taxation schemes in an economy where agents are debt-constrained. If agents default on their debt, they are banned from future credit markets, but retain their private endowments which are subject to income taxation. A change in the tax system changes the severity of punishment from default and, hence, leads to a limitation of possible risk sharing via private contracts. The welfare consequences of a change in the tax system depend on the relative magnitudes of increased risk sharing forced by the new tax system and the reduced risk sharing in private insurance markets. We quantitatively address this issue by calibrating an artificial economy to US income and tax data. We show that for a plausible selection of the structural parameters of our model, the change to a more redistributive tax system leads to less risk sharing among individuals and lower ex-ante welfare.
Parola chiave: Risk Sharing, Incomplete Markets, and Redistributive Taxation Soggetto: E62 - Fiscal Policy, H31 - Fiscal Policies and Behavior of Economic Agents: Household, and D91 - Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
Creator: McGrattan, Ellen R. and Prescott, Edward C. Series: Staff report (Federal Reserve Bank of Minneapolis. Research Department) Number: 294 Abstract:
Many stock market analysts think that in 1929, at the time of the crash, stocks were overvalued. Irving Fisher argued just before the crash that fundamentals were strong and the stock market was undervalued. In this paper, we use growth theory to estimate the fundamental value of corporate equity and compare it to actual stock valuations. Our estimate is based on values of productive corporate capital, both tangible and intangible, and tax rates on corporate income and distributions. The evidence strongly suggests that Fisher was right. Even at the 1929 peak, stocks were undervalued relative to the prediction of theory.
Soggetto: N22 - Economic History: Financial Markets and Institutions: U.S.; Canada: 1913-, E62 - Fiscal Policy, and G12 - Asset Pricing; Trading Volume; Bond Interest Rates