This chapter gives an overview of the male labour supply literature, focusing on what that literature implies for the design of the tax-transfer system. According to conventional wisdom, male labour supply is rather insensitive to tax rates. This, in turn, implies that the welfare losses from...

Based on the empirical estimation in this study, for the period 1962-1980, it appears that the underground economy in the United States was sensitive to the federal personal income tax rate, inflation, and the percentage of filed tax returns audited by the IRS. Presumably, the problem associated...

This paper compares the stochastic behavior of fiscal variables under optimal fiscal policy for the cases of full commitment by the government (Ramsey problem) and no commitment by the government (focusing on differentiable Markov perfect equilibrium). It shows that the cyclical properties of...

This paper investigates household decisions, and optimal taxation in an overlapping generations model in which individual utility depends on a weighted average of consumption of ones peers --- a ``keeping up with the Joneses'' consumption externality. In contrast to representative agent...

This paper examines the social opportunity cost of a hypothetical public project in Australia and compares these values with the cost of the project as measured by factor prices. Since 2001, the Australian taxation system has included an ad valorem tax, the Goods and Services Tax, however...

We find that the contemporary version of the dynamic Ramsey problem omits one important variable that we take into consideration in this paper. The effect of introducing of this variable into the analysis of dynamic inconsistency is similar to that of introducing expected inflation into the...

We study a two-player dynamic investment model with information externalities and provide necessary and sufficient conditions for a unique switching equilibrium. When the public information is sufficiently high and a social planer therefore expects an investment boom, investments should be...