In the open economy control conditions, the government's main concern should be ensurance of macroeconomic stabilization. One of real tools for achieving this goal is monetary and budgetary levers' combination, in which strong fiscal stimuls should be merged with monetary policy, although...

We develop a theory of optimal unemployment insurance (UI) that accounts for workers' job-search behavior and firms' hiring behavior. The optimal replacement rate of UI is the conventional Baily [1978]-Chetty [2006] rate, which solves the trade-off between insurance and job-search incentives,...

In response to increasing calls for policies to raise the U.S. saving rate, proposals are once again being offered in Congress to change the tax base from income to consumption. Beyond the important issues of income distribution (that is, outright unfairness) inherent in such a plan, it would...

Despite the extensive international experience with the assignments of revenue sources to different levels of government, the public finance literature still lacks a general theory of revenue assignments. Two sets of arguments have been separately developed in the literature to explain and guide...

In macroeconomic models, it is standard practice to assume that imperfectly competitive firms either set a price in advance and supply at the market-clearing quantity (price-setting) or set a quantity in advance and sell at the market-clearing price (quantity-setting). However, under imperfect...