The link between crude oil price and stock returns of the Group of Seven (G7) countries (Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States) was analyzed in this study using monthly data from January 1999 to March 2020. We adopt a similar approach to Kilian (Am Econ...

I develop a simple analytical New Keynesian model with a cost channel to gain new insights into the general properties of tax shocks. In this paper, I formally show that the cost channel itself can rule out the sunspot liquidity traps and secure a unique equilibrium with tax shocks. I also...