Gavin, William T.; Kydland, Finn; Pakko, Michael R. - 2022
of this interaction to aggregate fluctuations. Our innovation is to combine monetary policy shocks with non-indexed taxes … in a model in which the central bank implements policy using an interest rate rule. Monetary policy shocks enter as … persistent changes in the expected marginal tax rate on capital gains. We find that monetary policy had important effects on the …