A central equation for the fiscal theory of the price level (FTPL) is the government budget constraint (or "government valuation equation"), which equates the real value of government debt to the present value of fiscal surpluses. In the past decade, the governments of most developed economies...

We investigate whether tax incentives are effective in stimulating private investment in less developed countries, by exploiting the introduction of accelerated depreciation for fixed assets investment in China as a natural experiment. In contrast to the large positive impact of similar tax...

Numerous countries cut payroll taxes in response to economic downturns caused by COVID-19. This includes China, which completely exempted most firms from making social insurance (SI) contributions, resulting in an average tax cut of 21 percentage points on formal labor costs and approximately...

Responding to calls for reallocating taxing rights over multinationals' profits to reflect the place of user value creation, the OECD recently announced a Program of Work to implement international tax reform. I use the European Commission's 2018 proposal to introduce the “significant digital...

Is Quantitative Easing (QE) an effective substitute for conventional monetary policy? We study this question using a heterogeneous-agents model with nominal rigidities, as well as liquid and partially liquid wealth. The direct effect of QE is determined by the difference in marginal propensities...

The House Republican Task Force on Tax Reform released its Blueprint for tax reform in June 2016, at the center of which is a destination-based cash-flow tax (DBCFT) to replace the current federal income tax on corporations. The House GOP Blueprint represents the first time that the DBCFT has...

Lawsuits against the government form a part of the regular functioning of legal systems in democratic countries, and responding to such lawsuits an unavoidable part of governance. However, in the context of authoritarian regimes, administrative litigation has been viewed as a distinctively...

Estimating natural rate of unemployment (NAIRU) is important for understanding the joint dynamics of unemployment, inflation, and inflation expectation. However, existing literature falls short of endogenizing inflation expectation together with NAIRU in a model consistent way. We estimate a...

The recent financial crisis has shown that liquidity fluctuations in asset markets can have a large impact on the real economy. Many central banks started unconventional monetary policies in 2008, but we still have little understanding of optimal monetary and fiscal policies in such an...

State-owned enterprises (SOEs) have become active investors in global markets in the last decade, challenging policymakers in Canada and other OECD countries to confront the logic of “state capitalism.” This article develops a novel theory of the income taxation of SOEs. Many countries...