In this paper we …rst document inequality trends in wages, hours worked, earnings, consumption, and wealth for Germany from the last twenty years. We generally …nd that inequality was relatively stable inWest Germany until the German uni…cation (which happened politically in...

In the industrialized world the population is aging over time, reducing the fraction of the population in working age. Consequently labor is expected to be scarce, relative to capital, with an ensuing decline in the real return on capital. This paper uses demographic projections together with a...

In this paper we characterize quantitatively the optimal mix of progressive income taxes and education subsidies in a model with endogenous human capital formation, borrowing constraints, income risk and incomplete fi…nancial markets. Progressive labor income taxes provide social insurance...