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This paper investigates the characteristics of the Laffer curve in a neoclassical growth model of the US economy with incomplete markets and heterogeneous agents. The shape of the Laffer curve changes depending on which of transfers or government debt are varied to balance the government budget...
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We study the role of monetary policy when asset-price bubbles may form due to herd behavior in investment in an asset … from households to publicly invest in the old or the new technology. The three main results of the paper are that bubbles … directly access to less information than the investors; and that the central bank can eliminate bubbles by manipulating the …
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