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The fallacy of the fiscal theory of the price level, Again
Buiter, Willem H. - 2000
The Fiscal Theory of the Price Level (FTPL) rejects the fundamental 'Ricardian' proposition, that the government budget …
Persistent link: https://www.econbiz.de/10009781580
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Macroeconomic effects of capital tax rate changes
Bhattarai, Saroj; Lee, Jae Won; Park, Woong-yong; Yang, … - 2019
We study aggregate, distributional, and welfare effects of a permanent reduction in the capital tax rate in a dynamic equilibrium model with capital-skill complementarity. Such a tax reform leads to expansionary long-run aggregate effects, but is coupled with an increase in the skill premium....
Persistent link: https://www.econbiz.de/10012002979
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The fiscal theory of the price level with a bubble
Brunnermeier, Markus Konrad; Merkel, Sebastian; … - 2020
This paper incorporates a bubble term in the standard FTPL equation to explain why countries with persistently negative primary surpluses can have a positively valued currency and low inflation. It also provides an example with closed-form solutions in which idiosyncratic risk on capital...
Persistent link: https://www.econbiz.de/10012213139
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Fiscal multipliers and the choice of zero lower bound modeling
Siemsen, Thomas; Watzka, Sebastian - 2013
In this note we elaborate on the effect of the modeling choice of the zero lower bound on the size of the fiscal multiplier. To this end we contrast two different ways to implement the ZLB in a New Keynesian model: the ZLB modeled as an endogenous central bank reaction to a contractionary demand...
Persistent link: https://www.econbiz.de/10009772911
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Reforming budgetary language
Bradford, David F. - 2001
In the context of several examples of problems associated with present budgetary conventions, I revisit Musgrave's conceptual division of the government's program into Allocation, Distribution and Stabilization Branch subbudgets. I suggest progress towards Musgrave's ideal of a more informative...
Persistent link: https://www.econbiz.de/10011408439
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An equilibrium theory of nominal exchange rates
Hagedorn, Marcus - 2021
This paper proposes an equilibrium theory of nominal exchange rates, which offers a new perspective on various issues … features of this theory are that the nominal exchange rate is determined in international financial markets, that the risk … from the nominal exchange rate. In terms of policy, this novel theory implies that a country with an exchange rate peg and …
Persistent link: https://www.econbiz.de/10012619299
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Aggressive oil extraction and precautionary saving : coping with volatility
Ploeg, Frederick van der - 2010
The effects of stochastic oil demand on optimal oil extraction paths and tax, spending and government debt policies are analyzed when the oil demand schedule is linear and preferences quadratic. Without prudence, optimal oil extraction is governed by the Hotelling rule and optimal budgetary...
Persistent link: https://www.econbiz.de/10003966514
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Ageing, government budgets, retirement, and growth
Gonzalez-Eiras, Martín; Niepelt, Dirk - 2011
We analyze the short and long run effects of demographic ageing - increased longevity and reduced fertility - on per-capita growth. The OLG model captures direct effects, working through adjustments in the savings rate, labor supply, and capital deepening, and indirect effects, working through...
Persistent link: https://www.econbiz.de/10009010051
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Exposure to daily price changes and inflation expectations
D'Acunto, Francesco; Malmendier, Ulrike; Ospina, Juan; … - 2019
We show that, to form aggregate inflation expectations, consumers rely on the price changes they face in their daily lives while grocery shopping. Specifically, the frequency and size of price changes, rather than their expenditure share, matter for individuals' inflation expectations. To...
Persistent link: https://www.econbiz.de/10012057307
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A model of supply chain finance
Hu, Bo; Watanabe, Makoto; Zhang, Jun - 2023
This article develops a model in which an intermediary uses a supply chain finance (SCF) program to fund suppliers. The SCF program pools liquidity from suppliers and meanwhile provides immediate payment to suppliers with pressing liquidity needs. We show that the intermediary optimally selects...
Persistent link: https://www.econbiz.de/10014431335