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Journal Article
Optimal Ramsey Capital Taxation with Endogenous Government Spending
The authors study optimal capital income taxation in heterogeneous agent economies featuring endogenous government spending. Similar to Aiyagari (1995), they find that the long-run optimal capital tax rate should not be zero as long as the competitive equilibrium risk-free interest rate differs from the subjective time discount rate. The authors first argue that this result holds in a wide range of economic environments and is not limited to only the standard incomplete market model with heterogeneous agents. As an example, a decentralized economy with limited commitment is considered. ...
Journal Article
The Rising Federal Funds Rate in the Current Low Long-Term Interest Rate Environment
The low long-term yield is likely a result of high foreign demand for Treasuries rather than a near-zero federal funds rate.
Journal Article
Accounting for Age: The Financial Health of Millennials
While millennials hold higher levels of student loans, education is often an investment that improves productivity and future earnings. Given these considerations, the concerns regarding millennials? spending and saving habits may be at least partially eased, as they will likely have more time in the labor force to accrue assets and pay off their debts.
Journal Article
Filling the Tank on Fridays May Be a Bad Idea for St. Louisans
Gas prices in St. Louis can jump 10 percent overnight.
Journal Article
Same Target, Different Economies: A Cross-Country Analysis of Inflation
Though some countries adopt a common inflation target, nations often have different patterns of inflation.
Journal Article
The Value of $600 Across States Hit Hardest by COVID-19
The CARES act provides an extra $600 per week in unemployment benefits, but the purchasing power of those dollars varies across states, raising the question of whether the equal distribution of $600 across states is an equitable distribution.
Journal Article
The Wage Bills of COVID-19
The largest potential wage loss comes from the health care and social assistance industry.
How Financially Fit Are American Retirees?
From 1989 to 2016, the wealth of retired households increased in real terms. But data also indicated that wealth inequality worsened among retirees.
Working Paper
Time-Inconsistent Optimal Quantity of Debt
A key feature of the infinite-horizon heterogeneous-agents incomplete-markets (Inf-HAIM) framework is that the equilibrium interest rate of public debt lies below the time discount rate (regardless of capital). This happens because of a positive liquidity premium on asset returns due to imperfect risk sharing. This fundamental property of standard Inf-HAIM models, however, implies that the Ramsey planner's fiscal policy may be time-inconsistent---because the planner has a dominate incentive to issue plenty of debt such that all households are fully self-insured against idiosyncratic risk ...
Journal Article
Many Americans Still Lack Retirement Savings
This article aims to offer a glimpse into the current state of retirement readiness in the United States. We examine the participation in and usage of the two most common types of financial accounts designed exclusively for retirement savings. Overall, our analysis indicates that many households either do not utilize or underutilize the retirement savings plans available to them. We also examine how retirement savings vary with age and discuss alternative ways that nonparticipants may be preparing for retirement.