Optimal Fiscal Policy with Labor Selection

Beitrag in einer Fachzeitschrift


Details zur Publikation

Autor(en): Chugh S, Lechthaler W, Merkl C
Zeitschrift: Journal of Economic Dynamics & Control
Jahr der Veröffentlichung: 2018
ISSN: 0165-1889
Sprache: Englisch


Abstract

This paper characterizes long-run and short-run optimal fiscal policy in
the labor selection framework. In a calibrated non-Ramsey decentralized
equilibrium, labor market volatility is inefficient. Keeping fixed the
structural parameters, the Ramsey government achieves efficient labor
market volatility; doing so requires labor-income tax volatility that is
orders of magnitude larger than the “tax-smoothing” results based on
Walrasian labor markets, but a few times smaller than the results based
on search and matching markets. We analytically characterize
selection-model-consistent wedges and inefficiencies in order to
understand optimal tax volatility.


FAU-Autoren / FAU-Herausgeber

Merkl, Christian Prof. Dr.
Lehrstuhl für Volkswirtschaftslehre, insbesondere Makroökonomik


Zitierweisen

APA:
Chugh, S., Lechthaler, W., & Merkl, C. (2018). Optimal Fiscal Policy with Labor Selection. Journal of Economic Dynamics & Control. https://dx.doi.org/10.1016/j.jedc.2018.06.005

MLA:
Chugh, Sanjay, Wolfgang Lechthaler, and Christian Merkl. "Optimal Fiscal Policy with Labor Selection." Journal of Economic Dynamics & Control (2018).

BibTeX: 

Zuletzt aktualisiert 2018-11-08 um 03:15