We derive a sufficient statistics optimal tax formula in a general model that incorporates unemployment and endogenous … wages, to study the shape of the tax and transfer system at the bottom of the distribution. The sufficient statistics are … resembles a Negative Income Tax than an Earned Income Tax Credit relative to the case where unemployment and wage responses are …

In this paper, we argue that credit market imperfections impact not only the level of unemployment, but also its … steady-state unemployment, but also slow down the transitional dynamics. We then provide an empirical illustration based on a … persistence of unemployment …

efficient values, at the optimum gross wages and unemployment are lower. Average tax rates are moreover increasing in wages. The …We propose a canonical model of optimal nonlinear redistributive taxation with matching unemployment. In our model … observes negotiated wages. More progressive taxation leads to wage moderation that boosts labor demand. We design the optimal …

with less perverse effect on unemployment. Time inconsistency is more likely due to lack of credibility than to the short …

money growth leads to higher inflation and higher unemployment, so the long-run Phillips curve is not vertical. The optimal … monetary growth rate decreases with the workers' bargaining power, the level of unemployment benefits and the payroll tax rate …