This paper evaluates the challenges facing developing countries when there is uncertainty about the policy maker type. We consider a country characterized by volatile output, inelastic demand for fiscal outlays, high tax collection costs, and sovereign risk, where future output depends on the...

The Affordable Care Act introduces or expands taxes on incomes and full-time employment, beginning in 2014. The purpose of this paper is to characterize the new full-time employment taxes from the perspective of a household budget constraint, measure their magnitude, and assess their likely...

The empirical labor supply literature includes some simple aggregate studies, and some individual-level studies explicitly accounting for heterogeneity and the discrete choice, but sometimes leaving open the ultimately aggregate questions that motivated the study. As a middle ground, we...

I suggest that the aggregate implications of indivisible labor are few, and subtle. First, I model behavior in an 'indivisible labor' environment like those of Diamond and Mirrlees (1978, 1986), Hansen (1985), Rogerson (1988), Christiano and Eichenbaum (1992) and show that aggregate behavior in...

I show that the indivisible labor' models of Diamond and Mirrlees (1978, 1986), Hansen (1985), Rogerson (1988), Christiano and Eichenbaum (1992), and many others are, when aggregated across persons with the same marginal utility of income, equivalent to the divisible labor model of Lucas and...

Most studies of the intertemporal substitution of work use life cycle data and, from those studies, many have concluded that intertemporal labor substitution is unimportant for macroeconomics. This paper takes another look at life cycle data and argues that a consideration of measurement errors,...

We extend an analytical general equilibrium model of environmental policy with pre-existing labor tax distortions to include pre-existing monopoly power as well. We show that the existence of monopoly power has two offsetting effects on welfare. First, the environmental policy reduces monopoly...

This paper evaluates the degree to which current account patterns are explained by the variables suggested by the literature, and reflects on possible future patterns. We start with panel regressions explaining the current account of 69 countries during 1981-2006. We identify an asymmetric...