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Previous literature concludes that replacing wage taxation by taxes on a fixed factor or its rents benefits future generations. However, the effects of such steady-state gains on the transition generations have been left open. In this paper, we show that taxation of rents may also increase...
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Since the pioneering work of Krugman (1980) economists try to quantify the welfare gains from an increase in traded variety. The seminal work of Feenstra (1994) and its application to the U.S. of Broda and Weinstein (2006) allowed this quantification for the first time using highly disaggregated...
Persistent link: https://www.econbiz.de/10011373513
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and the economic environment. Optimised simple monetary policy rules imply that the relative weight on inflation …
Persistent link: https://www.econbiz.de/10012695263
In a small open developing country context, the author considers a three-sector general equilibrium framework and tries to find out the effects of foreign capital inflow on welfare of the country. Comparative-static results show that foreign capital inflow widens the skilled-unskilled wage gap...
Persistent link: https://www.econbiz.de/10011583766
other reaction coefficients, on inflation and output, are sub-optimal. However, an indirect exchange rate response, through … a policy reaction to Consumer Price Index (CPI) inflation rather than to domestic inflation, is welfare enhancing. This … result is independent of whether society values domestic or CPI inflation stabilization. …
Persistent link: https://www.econbiz.de/10011583794
This paper analyzes the central bank s optimal objective function in a small open economy model allowing for incomplete exchange rate pass-through. The results indicate that there are welfare gains from different types of monetary policy inertia. The welfare improvements of exchange rate...
Persistent link: https://www.econbiz.de/10011583801
In a small open developing country context, the author considers a three-sector general equilibrium framework and tries to find out the effects of foreign capital inflow on welfare of the country. Comparative-static results show that foreign capital inflow widens the skilled-unskilled wage gap...
Persistent link: https://www.econbiz.de/10011669502