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Author:Tesar, Linda L. 

Working Paper
Saving Europe?: The Unpleasant Arithmetic of Fiscal Austerity in Integrated Economies

What are the macroeconomic effects of tax adjustments in response to large public debt shocks in highly integrated economies? The answer from standard closed-economy models is deceptive, because they underestimate the elasticity of capital tax revenues and ignore cross-country spillovers of tax changes. Instead, we examine this issue using a two-country model that matches the observed elasticity of the capital tax base by introducing endogenous capacity utilization and a partial depreciation allowance. Tax hikes have adverse effects on macro aggregates and welfare, and trigger strong ...
Working Paper Series , Paper WP-2014-13

Working Paper
Tastes and technology in a two-country model of the business cycle: explaining international co-movements

The authors develop a two-country real business cycle model and examine its consistency with the behavior of relative prices, and the model's implications for economic aggregates at the sectoral level.
Working Papers (Old Series) , Paper 9019

Working Paper
A Macroeconomic Model of Healthcare Saturation, Inequality and the Output-Pandemia Tradeoff

Covid-19 became a global health emergency when it threatened the catastrophic collapse of health systems as demand for health goods and services and their relative prices surged. Governments responded with lockdowns and increases in transfers. Empirical evidence shows that lockdowns and healthcare saturation contribute to explain the cross-country variation in GDP drops even after controlling for Covid-19 cases and mortality. We explain this output-pandemia tradeoff as resulting from a shock to subsistence health demand that is larger at higher capital utilization in a model with ...
Working Paper Series , Paper WP-2021-02

Working Paper
Supply-side economics in a global economy

Recent quantitative studies predict large welfare gains from reducing tax distortions in a closed economy, despite costly transitional dynamics to more efficient tax systems. This paper examines transitional dynamics and gains of tax reforms for countries in a global economy, and provides numerical solutions for international tax competition games. Tax reforms in a global economy cause cross-country externalities through capital flows in response to consumption-smoothing and debt-servicing effects, with taxes on world payments affecting the distribution of welfare gains. Within the class of ...
International Finance Discussion Papers , Paper 507

Conference Paper
U.S. portfolio investment in Asian capital markets



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