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initial response of revenue to changes in the bases is weak. In the case of wage tax it takes half a year for the elasticity …
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We study nominal GDP targeting as optimal monetary policy in a model with a credit market friction following Azariadis, Bullard, Singh and Suda (2018), henceforth ABSS. As in ABSS, the macroeconomy we study has considerable income inequality which gives rise to a large private sector credit...
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