This paper provides new evidence on why men and women leaders make different choices. We first use a simple political agency model to illustrate how voters' gender bias can lead reelection-seeking female politicians to undertake different policies. We then test the model's predictions by...

Institutional constraints to counter potential abuses in the use of political power have been viewed as essential to well functioning political institutions and good public policy outcomes in the Western World since the time of ancient Greece. A sophisticated intellectual tradition emerged to...

This paper investigates how non-tax revenues impact tax collection in Brazilian municipalities, focusing on shifts in intergovernmental transfers due to population updates. Our analysis reveals asymmetric effects of shocks: revenue gains lead to increased spending without tax reductions, while...

Trade policy is set by domestic political bargaining between globalists and protectionists, representing owners of factors specific to export and import-competing sectors respectively. Consistent with the post-Civil War Era of Restriction, protectionists implement high tariffs when status quo...

This paper characterizes optimal monetary policy in a canonical heterogeneous-agent New Keynesian (HANK) model with wage rigidity. Under discretion, a utilitarian planner faces the incentive to redistribute towards indebted, high marginal utility households, which is a new source of inflationary...

We show that if the central bank operates without commitment and faces constraints on its balance sheet, helicopter drops can be a useful stabilization tool during a liquidity trap. With commitment, even with balance sheet constraints, helicopter drops are irrelevant

This paper develops a new approach to make welfare assessments based on the notion of Dynamic Stochastic weights (DS-weights for short). For a large class of dynamic stochastic economies with heterogeneous individuals, we introduce an aggregate additive decomposition that satisfies desirable...

Most governments are mandated to maintain their economies at full employment. We propose that the best marker of full employment is the efficient unemployment rate, u*. We define u* as the unemployment rate that minimizes the nonproductive use of labor--both jobseeking and recruiting. The...

This paper develops a welfare accounting decomposition that identifies and quantifies the ultimate origins of welfare gains and losses in general economies with heterogeneous individuals and disaggregated production. The decomposition---exclusively based on preferences and technologies---first...