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Optimal Dynamic Taxes
Golosov, Mikhail - 2011
We study optimal labor and savings distortions in a lifecycle model with idiosyncratic shocks. We show a tight …-based expressions for the dynamic optimal distortions. We derive a generalization of a savings distortion for non-separable preferences …
Persistent link: https://www.econbiz.de/10013117883
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Seigniorage and Fixed Exchange Rates : An Optimal Inflation Tax Analysis
Fischer, Stanley - 2021
A country that decides to fix its exchange rate thereby gives up control over its own inflation rate and the determination of the revenue received from seigniorage. If the country goes further and uses a foreign money, it loses all seigniorage. This paper uses an optimal inflation tax approach...
Persistent link: https://www.econbiz.de/10013215367
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Optimal Monetary and Fiscal Policy in a Liquidity Trap
Eggertsson, Gauti B. - 2012
In previous work (Eggertsson and Woodford, 2003), we characterized the optimal conduct of monetary policy when a real disturbance causes the natural rate of interest to be temporarily negative, so that the zero lower bound on nominal interest rates binds, and showed that commitment to a...
Persistent link: https://www.econbiz.de/10013102000
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Optimal Fiscal and Monetary Policy
Chari, Varadarajan V.; Kehoe, Patrick J. - 2021
We provide an introduction to optimal fiscal and monetary policy using the primal approach to optimal taxation. We use this approach to address how fiscal and monetary policy should be set over the long run and over the business cycle. We find four substantive lessons for policymaking: Capital...
Persistent link: https://www.econbiz.de/10013230363
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Time Consistency of Fiscal and Monetary Policy : A Solution
Persson, Mats; Persson, Torsten; Svensson, Lars E. O. - 2021
This paper demonstrates how time consistency of the Ramsey policy - the optimal fiscal and monetary policy under commitment - can be achieved. Each government should leave its successor with a unique maturity structure for the nominal and indexed debt, such that the marginal benefit of a...
Persistent link: https://www.econbiz.de/10013232768
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Optimal Taxation by the Monetary Authority
Walsh, Carl E. - 2021
Reserve requirements imposed against bank deposits, nominal interest payments on bank reserves (or on base money), and inflation can all be viewed as generating tax effects. Any analysis of optimal monetary policy in a steady-state equilibrium needs to consider the simultaneous choice of all the...
Persistent link: https://www.econbiz.de/10013235318
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A Model of Secular Stagnation
Eggertsson, Gauti B. - 2014
oversupply of savings. Other forces that work in the same direction and can both create or exacerbate the problem include a drop …
Persistent link: https://www.econbiz.de/10013045296
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Precautionary Saving and the Marginal Propensity to Consume Out of Permanent Income
Carroll, Chris - 2010
The budget constraint requires that, eventually, consumption must adjust fully to any permanent shock to income. Intuition suggests that, knowing this, optimizing agents will fully adjust their spending immediately upon experiencing a permanent shock. However, this paper shows that if consumers...
Persistent link: https://www.econbiz.de/10013151558
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Savings and the Terms of Trade Under Borrowing Constraints
Agénor, Pierre-Richard; Aizenman, Joshua - 2021
This paper examines the extent to which permanent terms-of-trade shocks have an asymmetric effect on private savings … in bad states of nature, savings rates will respond asymmetrically to favorable movements in the permanent component of … standard determinants of private savings. The results, based on panel data for non-oil commodity exporters of sub …
Persistent link: https://www.econbiz.de/10013244885
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Structural Uncertainty and the Value of Statistical Life in the Economics of Catastrophic Climate Change
Weitzman, Martin - 2007
Using climate change as a prototype motivating example, this paper analyzes the implications of structural uncertainty for the economics of low-probability high-impact catastrophes. The paper shows that having an uncertain multiplicative parameter, which scales or amplifies exogenous shocks and...
Persistent link: https://www.econbiz.de/10012775805