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Redistribution and insurance with simple tax instruments

Findeisen, Sebastian; Sachs, Dominik - 2015

provide a novel decomposition of labor income tax formulas into a redistribution and an insurance component. The latter is … capital tax is non-zero and trades off redistribution and insurance against savings distortions. Our quantitative results … bound on optimal taxes: even for welfare functions that do not value redistribution, marginal tax rates are positive for all …

Persistent link: https://www.econbiz.de/10011283108

The Social Cost of Stochastic and Irreversible Climate Change

Cai, Yongyang - 2013

There is great uncertainty about the impact of anthropogenic carbon on future economic wellbeing. We use DSICE, a DSGE extension of the DICE2007 model of William Nordhaus, which incorporates beliefs about the uncertain economic impact of possible climate tipping events and uses empirically...

Persistent link: https://www.econbiz.de/10013088403

New Activities, the Welfare Cost of Uncertainty and Investment Policies

Aizenman, Joshua - 2008

This paper studies the effect of policy uncertainty on the formation of new activities in Romer's (1994) type of an economy, where productivity of labor increases with the number of capital goods. Adding a new capital good requires a capital specific set-up cost, invested prior to using the...

Persistent link: https://www.econbiz.de/10012774962

The Welfare Cost of Uncertainty in Policy Outcomes

Schlee, Edward E. - 2016

This paper proposes a simple index of the welfare significance of uncertainty in the public goods resulting as policy outcomes. Our measure is the ex ante compensation an individual would require to accept an uncertain level of service compared to receiving the expected value of the distribution...

Persistent link: https://www.econbiz.de/10012978519

Devaluation Risk and the Syndrome of Exchange-Rate-Based Stabilizations

Mendoza, Enrique G.; Uribe, Martín - 2021

This paper shows that the risk of devaluation can be an important factor accounting for the stylized facts of exchange-rate-based stabilizations. This conclusion follows from studying the quantitative implications of a two-sector equilibrium business cycle model of a small open economy...

Persistent link: https://www.econbiz.de/10013244367

Investment in New Activities and the Welfare Cost of Uncertainty

Aizenman, Joshua - 2022

Recent literature has highlighted the importance of new activities in development and growth. It was shown that trade distortions such as tariffs are associated with first-order costs stemming from the induced drop in the formation of new activities. This paper demonstrates that uncertainty may...

Persistent link: https://www.econbiz.de/10013324467

Uncertainty, Redistribution, and the Labor Market

Mulligan, Casey B. - 2013

Uncertainty and its composition can affect the demand for social insurance, and thereby the labor market. This paper shows that small to medium-sized increases in uncertainty or risk aversion are enough to recommend an expansion of the safety net that would be broadly similar to the actual...

Persistent link: https://www.econbiz.de/10013074281

Loss Aversion in Politics

Alesina, Alberto F. - 2015

status quo. The application of these results to a model of redistribution leads to empirically plausible implications …

Persistent link: https://www.econbiz.de/10013024497

Dissecting inequality-averse preferences

Bergolo, Marcelo; Burdín, Gabriel; Burone, Santiago; … - 2021

Although different approaches and methods have been used to measure inequality aversion, there remains no consensus about its drivers at the individual level. We conducted an experiment on a sample of more than 1800 first-year undergraduate economics and business students in Uruguay to...

Persistent link: https://www.econbiz.de/10012697782

The Cost of Uncertainty About the Timing of Social Security Reform

Caliendo, Frank - 2015

We develop a model to study optimal decision making in the face of uncertainty about the timing and structure of a future event. The model is used to study optimal decision making and welfare when individuals face uncertainty about when and how Social Security will be reformed. When individuals...

Persistent link: https://www.econbiz.de/10013014666

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