. The basic framework considers an economy with a large informal production sector and a heterogeneous work force. The labor … improves competitiveness, and expands the formal sector at the expense of the informal sector. Hence, in a two-sector economy …

control inflation and influence the economy in the usual ways. The paper discusses models of fiscal limits and their … implications and lays out a research agenda to integrate political economy and empirical considerations with general equilibrium …

) Fiscal stimulus or “helicopter drops of money” are powerful and, indeed, pull the economy out of the zero lower bound. More …