This paper introduces a recursive algorithm with which to generate complete and accurate budget constraints using static microsimulation models. We describe the generic algorithm and discuss and extension by which reasons for any change in the marginal effective tax rate may be explained. We...

This paper considers the sensitivity of policy simulation to the specification of the labour market in an Applied General Equilibrium (AGE) model of the European Union. We consider a variety of adjustments to the labour market, including the introduction of labour supply heterogeneity and...