A stochastic discount factor is introduced into a real-business-cycle setup with a government sector. The model is calibrated to Bulgarian data for the period 1999-2018, which is after the introduction of the currency board arrangement. The quantitative importance of shocks to the discount...

Progressive capital taxation is introduced into a real-business-cycle (RBC) model with fiscal policy. The artificial economy is calibrated to Bulgarian data for the period 1999-2018. The quantitative role of progressive taxation on capital income is investigated for the stabilization of cyclical...