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We consider an overlapping generation framework with search and private information to study optimal taxation. Agents sequentially trade in markets that are characterized by different frictions and trading protocols. In frictional decentralized markets, agents receive shocks that determine if...
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sheet. Agents in this economy face limited commitment in some markets and government bonds can be used as collateral. When … balance sheet normalization should aggressively respond to the total debt issued in the economy relative to its target. These …
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