Showing 1 - 10 of 191
This paper studies optimal fiscal policy in an economy where heterogeneous agents with uncertain lifetimes coexist. We show that some plausible social welfare functions lead to time-inconsistent optimal plans, and we suggest restrictions on social preferences that avoid the problem. The...
Persistent link: https://www.econbiz.de/10012477491
We study the effects of changes in uncertainty about future fiscal policy on aggregate economic activity. Fiscal deficits and public debt have risen sharply in the wake of the financial crisis. While these developments make fiscal consolidation inevitable, there is considerable uncertainty about...
Persistent link: https://www.econbiz.de/10012461340
This paper explores optimal fiscal policy in an overlapping-generations general-equilibrium model under uncertainty and the impact on optimal policy of the introduction of a type of policy stickiness intended to account for the stylized fact that major reforms happen infrequently. In general,...
Persistent link: https://www.econbiz.de/10012471764
-generational transmission of wealth. Financial markets are incomplete, exposing agents to both labor income and capital income risk. We show … that the stationary wealth distribution is a Pareto distribution in the right tail and that it is capital income risk …
Persistent link: https://www.econbiz.de/10012463917
A significant source of risk arises from uncertainty concerning future government policy. Government action - - tax … preexisting rules. The effects of government relief - - compensation, grandfathering, phase-ins - - on ex ante incentives and risk …
Persistent link: https://www.econbiz.de/10012476042
We study optimal fiscal policy in a small open economy (SOE) with sovereign and private default risk. The SOE …
Persistent link: https://www.econbiz.de/10012461202
Monetary policy decisions tend to be based on systematic analysis of alternative policy choices and their associated macroeconomic impacts: this is science. Fiscal policy choices, in contrast, spring from unsystematic speculation, grounded more in politics than economics: this is alchemy. In...
Persistent link: https://www.econbiz.de/10012462148
that procyclicality is more pervasive in countries with higher sovereign risk and provide a model of optimal fiscal policy …
Persistent link: https://www.econbiz.de/10012480252
The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition are uncertain. Drawing on the evidence in Alesina and Ardagna (2010), we emphasize whether or not the fiscal consolidation is driven by tax rises or expenditure cuts. We find that the...
Persistent link: https://www.econbiz.de/10012460814
Persistent link: https://www.econbiz.de/10002114536