This paper compares the Tel-Aviv Stock Exchange (TASE) 25 Index (TA25) to the Samp;P 500 Index with respect to the extent that the Technical Analysis method of moving average can beat the buy-and-hold policy. Previous research on the Samp;P 500 Index is inconclusive, while TA25 has never been...

In this paper, we study consumption risk sharing when individual income shocks are persistent and not publicly observable, and individuals can default on contracts at the price of financial autarky. We find that, in contrast to a model where the only friction is limited enforcement, our model...

This article studies the properties of optimal fiscal policy in a stochastic growth model when the government cannot commit itself beyond the next period's capital income tax rate. We find that the results contrast markedly with those under full commitment. First, capital income tax rates are...

We investigate optimal tax policy in a Romer-style endogenous growth model. We derive formulas for the optimal tax rates on capital, labor, and innovation on a balanced growth path. We compute the balanced growth path and the transition to it with optimal policy for a range of parameter values....