Showing 1 - 10 of 10
Persistent link: https://www.econbiz.de/10013342437
How are optimal taxes affected by the presence of superstar phenomena at the top of the earnings distribution? To answer this question, we extend the Mirrlees model to incorporate an assignment problem in the labor market that generates superstar effects. Perhaps surprisingly, rather than...
Persistent link: https://www.econbiz.de/10011388149
We show that the Diamond and Mirrlees (1971) linear tax model contains the Mirrlees (1971) nonlinear tax model as a special case. In this sense, the Mirrlees model is an application of Diamond-Mirrlees. We also derive the optimal tax formula in Mirrlees from the Diamond-Mirrlees formula. In the...
Persistent link: https://www.econbiz.de/10011451445
We develop a multi-risk SIR model (MR-SIR) where infection, hospitalization and fatality rates vary between groups-in particular between the "young", "the middleaged" and the "old". Our MR-SIR model enables a tractable quantitative analysis of optimal policy similar to those already developed in...
Persistent link: https://www.econbiz.de/10012621091
The authors show that even when the exchange rate cannot be devalued, a small set of conventional fiscal policy instruments can robustly replicate the real allocations attained under a nominal exchange rate devaluation in a standard New Keynesian open economy environment. They perform the...
Persistent link: https://www.econbiz.de/10010343342
Real risk-free interest rates have trended down over the past 30 years. Puzzlingly in light of this decline, (1) the return on private capital has remained stable or even increased, creating an increasing wedge with safe interest rates; (2) stock market valuation ratios have increased only...
Persistent link: https://www.econbiz.de/10012030362
The paper elicits a mechanism by which private leverage choices exhibit strategic complementarities through the reaction of monetary policy. When everyone engages in maturity transformation, authorities have little choice but facilitating refinancing. In turn, refusing to adopt a risky balance...
Persistent link: https://www.econbiz.de/10010279390
We investigate the effects of input variety creation and destruction on both micro- and macroeconomic outcomes using detailed data from Belgium. Our microeconomic analysis establishes that the elasticity of downstream firms' marginal cost to supplier separation captures the area under the input...
Persistent link: https://www.econbiz.de/10014550323
The recent unravelling of the Eurozone's financial integration raised concerns about feedback loops between sovereign and banking insolvency. The paper provides a theory of the feed backloop that allows for both domestic bailouts of the banking system and sovereign debt forgiveness by...
Persistent link: https://www.econbiz.de/10012232132
Traditional banking is built on four pillars: SME lending, access to public liquidity, deposit insurance, and prudential supervision. This paper unveils the logic of the quadrilogy by putting core services to "special depositors and borrowers" at the heart of the analysis, and makes room for...
Persistent link: https://www.econbiz.de/10012232147