Rossi, Raffaele - Department of Economics, Adam Smith Business School - 2007
This paper analyzes a New Keynesian model with Rule-of-Thumb consumers (ROTC) as in Galí et al.(2007) and a fiscal policy which levies a proportional income tax. We
nd that, when the share of ROTC is above a specified threshold and di¤erently from the usual Leeper (1991) result, the...