This paper reconsiders the case for the use of fiscal policy based on a "functional finance" approach that advocates the use of fiscal policy to secure high levels of demand in the context of private aggregate demand, which would otherwise be too low. This "functional finance" view means that...

Recent developments in macroeconomic policy, in terms of both theory and practice, have elevated monetary policy while downgrading fiscal policy. Monetary policy has focused on the setting of interest rates as the key policy instrument, along with the adoption of inflation targets and the use of...

This paper studies the welfare properties of distortionary transfers in a life-cycle growth model where natural capital is private property. The main result is that, under credible pre-commitment, each newborn generation prefers positive taxes-subsidies to laissez-faire conditions when the...

This paper studies the Ramsey problem of optimal labor income taxation in a simple model economy which deviates from a first best representative agent economy in three important aspects, namely, flat rate second best tax, monopoly power in intermediate product market, and monopolistic wage...

This work is focused on identifying the relationship an economic system and its policies have with the environment. The biosphere is chosen in particular as object of analysis but this can be extended by means of an ecosystem recursive properties. The common factor involved in the relationship...

The German Income Tax Reform 2000, which announced a reduction in income tax rates to be implemented in a series of three stages, was welcomed by the public as a step towards unleashing lurking growth potentials. Nonetheless, in the course of the year 2001 a dispute arose, centering around the...

In this paper, we develop a simple theoretical model in order to explain how politicians choose between progressive and regressive tax schemes that serve to afford some local service production costs. It consists of a bipartisan model in which each party’s preferences are lexicographic, giving...

Nous étudions l'impact des regroupements municipaux survenus au Québec entre 1992 et 1999 sur les taux de taxation effectifs et la valeur marchande des propriétés résidentielles. Nous montrons que l'effet d'un regroupement sur ces deux volets de la vie municipale est indéterminé....

The recent general trend of cutting top marginal income tax rates in industrialized economies and the policy concern of enhancing competition in the US and the EU product markets subtly motivate the question if low income tax rates are optimal in an economy with imperfectly competitive markets....

We investigate the dynamic effects of five different fiscal shocks on the US economy using a structural vector autoregressive (SVAR) model that uses Blanchard-Quah type restrictions. We find that an increase in indirect taxes or in corporate taxes has a contractionary effect on the economy,...