Showing 1 - 10 of 37
systems as a means to finance unemployment benefits: a sales-tax-cum-labor-subsidy system versus a wage tax system. The two … relatively small 'home' country and a large 'foreign' country. It compares the economic performance of two alternative tax … systems are applied to the home country, while the wage tax system always obtains in the foreign country. In stark contrast …
Persistent link: https://www.econbiz.de/10010324982
This paper assesses the transmission of fiscal policy shocks in a New Keynesian framework where government expenditures contribute to aggregate production. It is shown that even if the impact of government expenditures on production is small, this assumption helps to reconcile the models'...
Persistent link: https://www.econbiz.de/10010325148
This paper analyzes enhanced cooperation agreements in corporate taxation in a three country tax competition model … where countries differ in size. We characterize equilibrium tax rates and the optimal tax responses due to the formation of … an enhanced cooperation agreement. Conditions for strategic complementarity or strategic substitutability of tax rates …
Persistent link: https://www.econbiz.de/10010325641
We study optimal government spending in a business cycle model with frictional unemployment. The Ramsey optimal policy is contrasted with a reference policy which would be first best in a frictionless economy. Results are: the Ramsey policy i) implies a higher steady state ratio of government...
Persistent link: https://www.econbiz.de/10010325681
This paper examines the pricing of public debt in a quantitative macroeconomic model with government default risk. Default may occur due to a fiscal policy that does not preclude a Ponzi game. When a build-up of public debt makes this outcome inevitable, households stop lending such that the...
Persistent link: https://www.econbiz.de/10010325941
In this note I argue that the desirability of fiscal policy in response to the current crisis depends on whether one views the current crisis as a temporary deviation from a unique equilibrium or as a bad equilibrium out of multiple equilibria. The paper presents a simple Diamond (1982) type of...
Persistent link: https://www.econbiz.de/10010326063
This paper analytically derives the conditions under which the slope of the tax reaction function is negative in a … classical tax competition model. If countries maximize welfare, we show that a negative slope (reflecting strategic … parameter configurations. The strategic tax response is crucial for understanding tax competition games, as well as for …
Persistent link: https://www.econbiz.de/10010326173
Recent macro developments in the euro area have highlighted the interactions between fiscal policy, sovereign debt, and financial fragility. We take a structural macroeconomic model with frictions in the financial intermediation process, in line with recent research, but introduce asset choice...
Persistent link: https://www.econbiz.de/10010326246
, possibly destroying the case for flexibility. Also, improved budget monitoring and greater transparency increase the benefits …
Persistent link: https://www.econbiz.de/10011604479
In this paper, we revisit the effects of government spending shocks on private consumption within an estimated New-Keynesian DSGE model of the euro area featuring non-Ricardian households. Employing Bayesian inference methods, we show that the presence of non-Ricardian households is in general...
Persistent link: https://www.econbiz.de/10011604559