This paper examines the economic and related consequences of immigration from a less developed country (LDC) to a developed country (DC) in three different stylized cases: A guest worker society of the Dubai type, an immigrant society of the US type, and a tax-based welfare state with...

The increasing globalization of economic activity is bringing an awareness of the international consequences of tax policy. The move toward the common European market in 1992 raises the important question of how inefficiencies in the various tax systems—such as self-defeating tax competition...

How do fluctuations in Keynes’s notion of aggregate effective demand and their nominal income and expenditure counterparts divide into output and price level changes? Friedman called this the “missing equation” problem, and declared that neither Keynesians, nor Monetarists, nor he had...

A push-pull-brake model of capital flows is used to study the effects of fiscal policy changes on private capital flows to emerging Europe during 2000-07. In the model, countercyclical fiscal policy has two opposing effects on capital inflows: (i) a conventional absorptionreducing effect, as a...

The stylized facts of macroeconomic time series can be presented by fitting structural time series models. Within this framework, we analyze the consequences of the widely used detrending technique popularized by Hodrick and Prescott (1980). It is shown that mechanical detrending based on the...

Since the mid-seventies fiscal policy in many OECD countries has been faced with the problem of rapidly rising public debt. The dynamics of public debt can be traced to two factors: first, the spread between the interest rate and the growth rate of the economy, and second, the primary budget...