The extent of taxation and redistribution policy is generally determined at a political-economy equilibrium by a balance between those who gain and those who lose from a more extensive tax-transfer policy. In a stylized model of migration and human capital formation, we find, somewhat against...

Migrants, being relatively low earners, are net beneficiaries of the welfare state. However, this paper uses a dynamic model to show that because of migrants’ positive influence on the pension system, which is an important pillar of any welfare state, migration could be beneficial to all...

The paper provides an overview of the role of the fiscal imbalances and the ensuing public debt in explaining major episodes in Israel’s recent economic developments. The main conclusions from the Israeli budgetary developments may have more general validity: (a) deficits lead to inflation and...