saving, 2) the individual's utility function; and 3) the labor income tax and the pension benefit function. In case of a … linear labor income tax and earnings-dependent pensions, which approximate the current German pension system, the theory … predicts a rise in employment in response to a payroll tax increase for a conventional specification of the utility function …

.2.Consumption tax cuts and transfers to households primarily stabilize private con-sumption, and subsidies prevent firm defaults …

to 0.2. Consumption tax cuts and transfers to households primarily stabilize private consumption, and subsidies prevent …