The picture of economic well-being depends crucially on how it is measured. We introduce a new measure of economic well-being that includes public consumption, income from wealth, and household production. The differences in scope and method between our measure and standard income lead to...

Using a macroeconometric model we provide a quantitative estimate of the cash transfer or tax cut that would achieve recovery from a severe recession when the central bank is unable to achieve full recovery because of the zero bound. We introduce an automatic transfer and simulate its triggering...

The purpose of this paper is to reply to Shapiro and Slemrod's recent article in the American Economic Review (March 2003) and address the broader issue: Is a tax rebate an effective tool for combating a recession? We make three points. First, there are serious problems with their consumer...

The simulations in this paper use actual 2004 data on carbon emissions and per capita GDP from 178 countries to provide a rough estimate of how much better off high-income countries might be by compensating low-income countries to help reduce carbon emissions rather than doing it without their...

Is a consumption tax equivalent to a wage tax? This article examines this question in a two-period life-cycle model with Cobb-Douglas production and utility functcons. Three taxes are compared: income, wage, and consumption. The article shows how equivalence depends crucially on government debt...

Abstract Analysts agree that designing a satisfactory tax rule for owner-occupied housingposes a senous challenge for the personal (cash flow) consumption tax that recently has been introduced in Congress by several senators. We compare tax rules for owner-occupied housing by performing...

This article presents an alternative approach to the welfare economics of taxes, and to the choice between an income, wage, and consumption tax. In contrast to standard efficiency analysis of taxes, and to much of the optimal growth literature, the central focus is on the welfare of different...

This article constructs a transitional protection rule-an “old-wealth deduction†-for conversion of the income tax to a personal consumption tax and tests it in four stylized life cycle economies (identical, pension, bequest, and spender) by performing numerical simulations. It is...