In a general equilibrium model of a small open economy with a nontraded goods sector involuntary low-skilled labour unemployment is introduced by an exogenously given wage rate, orientating ourselves by what has been called in the literature the 'European scenario'. By the concept of constrained...

This paper empirically investigates distributional and welfare effects of Germany's year 2000 income tax reform. The reform is simulated in an ex-ante behavioral microsimulation approach. Dead weight loss of changes in capital income taxation is estimated in a structural model for household...

In a New Keynesian DSGE model with non-Ricardian consumers, we show that automatic stabilization according to a countercyclical spending rule following the idea of the debt brake is well suited both to steer the economy and in terms of welfare. In particular, the adjustment account set up to...