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lead to quite different macroeconomic dynamics. Furthermore, it is found that the PET yields welfare gains, relative to the … income tax, for all the demand shocks considered. The PET yields welfare losses, however, under a supply shock. …
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This paper studies how tax-and-transfer progressivity influences aggregate fluctuations when interacting with household heterogeneity. Using a simple static model of the extensive margin labor supply, we analytically characterize how a degree of progressivity influences differential labor supply...
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in a matching environment ('Hosios condition'), tax progression improves steadystate welfare up to a certain threshold … progression is welfare-enhancing up to a certain threshold and always shifts relative utility from optimizing to rule …
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