This paper investigates the effects of macroeconomic uncertainty on economic growth in the presence of fiscal consolidation in South Africa. Markov-switching dynamic regression (MSDR) and time-varying parameter vector autoregression (TVP-VAR) were performed using time series data from 1994 to...

This paper critically evaluates debates over the causes of U.S. inflation. We first show that claims that the Biden stimulus was the major cause of inflation are mistaken: the key data series – stimulus spending and inflation – move dramatically out of phase. While the first ebbs quickly,...

Reliance on established macroeconomic thinking is not of much use in trying to understand what to do in response to the constellation of forces driving up inflation and slowing down growth in these times of COVID-19 and war. This paper attempts to reduce the heat and turn up the light in the...

President Biden signed a $1.9 trillion COVID relief package (the “American Rescue Plan”) on March 11, 2021. Without a corresponding increase in taxes, this plan has set off alarm bells for those concerned about the expansion of government deficits and debt. Mainstream economists have raised...

The notion of "transfer prices" comes from The United States of America (XIX - XX cenrury) representing an equitable part of the tax. This notion was developed because of different taxation, meaning that the states were perceiving taxes established at a local level (different in their quantum...

This paper contributes to the debate about fiscal multipliers by studying the impacts of government investment in conventional neoclassical growth models. The analysis focuses on two dimensions of fiscal policy that are critical for understanding the effects of government investment:...

Increases in government spending trigger substitution effects--both inter- and intra-temporal--and a wealth effect. The ultimate impacts on the economy hinge on current and expected monetary and fiscal policy behavior. Studies that impose active monetary policy and passive fiscal policy...

This paper analyzes the theoretical and quantitative implications of optimal capital taxation in the neoclassical growth model with aggregate shocks and incomplete markets. The model features a representative-agent economy with proportional taxes on labor and capital. I first consider the case...

The role of the state is finally the decision of the citizens. The government, being a result of elections, can provide more or less protection and increase or decrease expenditures. Anyway for achieving goals and for being performant the state definitly has to promote a good governance. Good...

Robert Solow has criticized our 2006 Journal of Economic Perspectives essay describing "Modern Macroeconomics in Practice." Solow eloquently voices the commonly heard complaint that too much macroeconomic work today starts with a model with a single type of agent. We argue that modern...