The conventional menu cost framework performs poorly with realistic labour supply elasticities; the menu costs required for price rigidity are very high and the welfare consequences of monetary disturbances are negligible. We show that the presence of dual labour markets greatly improves the...

The literature suggests that the concern for economic efficiency calls for individual-based taxation of married couples with a higher rate on the primary earner. This paper reconsiders the choice of tax unit in the Becker model of household production. Our aim is to study the robustness of...

This paper presents an evaluation of the tax-transfer treatment of married couples in 15 EU countries using the EUROMOD microsimulation model. First, we show that many tax-transfer schemes in Europe feature negative jointness defined as a situation where the tax rate on one person depends...

This paper evaluates the tax treatment of married couples in OECD countries. While the existing literature has emphasized the relation between marginal taxes and hours of work, the novelty of our analysis is the incorporation of labor force participation responses. Indeed, the modern empirical...

We reconsider the result that efficient taxation involves a lower marginal tax on secondary earners than on primary earners. Introducing labor force participation responses into the analysis, we show that a second-earner tax allowance is better than selective marginal tax rates.

This paper evaluates the tax treatment of married couples in OECD countries. While the existing literature has emphasized the relation between marginal taxes and hours of work, the novelty of our analysis is the incorporation of labor force participation responses. Indeed, the modern empirical...

This paper presents an evaluation of the tax-transfer treatment of married couples in 15 EU countries using the EUROMOD microsimulation model. First, we show that many tax-transfer schemes in Europe feature negative jointness defined as a situation where the tax rate on one person depends...

The basic trade union model is extended to allow for a more sophisticated unemployment benefit system consisting of two benefit levels, one for short-term and one for long-term unemployed, and a rule determining whether an unemployed is short- or long-term. The purpose of this extension is...

In this paper we develop a theory of scale-invariant endogenous growth. By this we mean a theory capable of generating a balanced growth path where both the growth rate and the level of GDP per capita are independent of the size of population, where population growth is neither necessary nor...