This paper analyzes prudential controls on capital flows to emerging markets from the perspective of a Pigouvian tax that addresses externalities associated with the deleveraging cycle. It presents a model in which restricting capital inflows during boom times reduces the potential outflows...

This paper investigates how volatile the general price level can be in an equilibrium where all uncertainty is extrinsic. The government operates a lump-sum redistribution policy using fiat money. An approach to modeling asset market segmentation is introduced in which this tax policy determines...

This paper examines the impact monetary redistribution policies have on the amount of sunspot-induced volatility in an economy. A dynamic model of segmented asset markets is presented in which the tax-transfer policy determines, in a continuous way, the influence sunspots can have on the general...

Policy prescriptions for managing natural resource windfalls are based on the permanent income hypothesis: none of the windfall is invested at home and saving in an intergenerational SWF is dictated by smoothing consumption across different generations. Furthermore, with Dutch disease effects...

Revenue volatility affects the welfare of U.S. states, which typically do not smooth their expenditures over the cycle but instead spend revenues as received. Between 2000 and 2014 U.S. state tax revenue volatility increased to 10.8% of revenues, up from 2.9% in the previous three decades. This...

We investigate whether variation in the volatility of tax outcomes across firms is associated with the extent of financial constraints. We document a positive association between current-period financial constraints and the volatility of cash effective tax rates in subsequent periods. We find...

Over the past two decades, the volatility of the United States federal income tax revenue has increased. Looking deeper into the income composition of taxable sources, we find that tax revenue has increased its dependence on volatile — broadly defined--capital income, due in part to an...

This testimony makes three main points. First, income volatility, especially when it involves income declines, imposes significant hardships on American families. It heightens stress about finances and may increase household living expenses. These hardships are most pronounced for middle-and...