Search Results
Showing results 1 to 10 of approximately 57.
(refine search)
Working Paper
Optimal taxation and debt with uninsurable risks to human capital accumulation
Gottardi, Piero; Kajii, Atsushi; Nakajima, Tomoyuki
(2014-11-01)
We consider an economy where individuals face uninsurable risks to their human capital accumulation and study the problem of determining the optimal level of linear taxes on capital and labor income together with the optimal path of the debt level. We show both analytically and numerically that in the presence of such risks it is beneficial to tax both labor and capital income and to have positive government debt.
FRB Atlanta Working Paper
, Paper 2014-24
Working Paper
Time-Inconsistent Optimal Quantity of Debt
Chien, YiLi; Wen, Yi
(2020-10-29)
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 ...
Working Papers
, Paper 2020-037
Working Paper
Flexible Retirement and Optimal Taxation
Ndiaye, Abdoulaye
(2017-11-03)
This paper studies optimal insurance against private idiosyncratic shocks in a life-cycle model with intensive labor supply and endogenous retirement. In this environment, the optimal labor tax is hump-shaped in age: insurance benefits of taxation push for increasing-in-age taxes while rising labor supply elasticities and optimal late retirement of highly productive workers push for lowering taxes for old workers. In calibrated numerical simulations, the optimum achieves sizable welfare gains that age-dependent taxes do not deliver under the status quo US Social Security. Nevertheless, an ...
Working Paper Series
, Paper WP-2018-18
Working Paper
Implementing the Modified Golden Rule? Optimal Ramsey Capital Taxation with Incomplete Markets Revisited
Chen, Yunmin ; Chien, YiLi; Owyang, Michael T.
(2017-02-13)
What is the prescription of Ramsey capital taxation in the long run? Aiyagari (1995) addressed the question in a heterogeneous-agent incomplete-markets (HAIM) economy, showing that a positive capital tax should be imposed to implement the so-called modified golden rule (MGR). This paper revisits the long-standing issue. We first show that the Aiyagari?s result holds if the shadow price of raising government revenues through distorting taxes converges to zero in the limit at the Ramsey optimum. This ?if? is clearly a strong condition. As long as the condition fails to hold, we show (i) there ...
Working Papers
, Paper 2017-3
Working Paper
Optimal Taxes Under Private Information: The Role of the Inflation Tax
Gomis-Porqueras, Pedro; Waller, Christopher J.
(2017-05-31)
We consider an overlapping generation framework with search and private information to study optimal taxation. Agents sequentially trade in markets that are characterized by different frictions and trading protocols. In frictional decentralized markets, agents receive shocks that determine if they are going to be consumers or producers. Shocks are private information. Mechanism design is used to solve for the constrained optimal allocation. We then study whether a government can replicate the constrained optimal allocation with an array of policy instruments including fiat money. We show that ...
Working Papers
, Paper 2017-14
Working Paper
The Determination of Public Debt under both Aggregate and Idiosyncratic Uncertainty
Chien, YiLi; Wen, Yi
(2019-12-05)
We analyze the Ramsey planner's decisions to finance stochastic public expenditures under incomplete insurance markets for idiosyncratic risk. We show analytically that whenever the market interest rate lies below the time discount rate, the Ramsey planner has a dominant incentive to increase debt to meet the private sector's demand for full self-insurance regardless of the relative size of aggregate shocks---suggesting a departure from tax smoothing. However, if a full self-insurance Ramsey allocation is infeasible in the absence of a government debt limit, an interior or bounded Ramsey ...
Working Papers
, Paper 2019-038
Working Paper
A Quantitative Theory of Time-Consistent Unemployment Insurance
Pei, Yun; Xie, Zoe
(2016-11-01)
During recessions, the U.S. government substantially increases the duration of unemployment insurance (UI) benefits through multiple extensions. This paper seeks to understand the incentives driving these increases. Because of the trade-off between insurance and job search incentives, the classic time-inconsistency problem arises. During recessions, the U.S. government substantially increases the duration of unemployment insurance (UI) benefits through multiple extensions. This paper seeks to understand the incentives driving these extensions. Because of the trade-off between insurance and ...
FRB Atlanta Working Paper
, Paper 2016-11
Working Paper
Optimal Fiscal Policies under Market Failures
Chien, YiLi; Wen, Yi
(2020-09-11)
The aggregate capital stock in a nation can be overaccumulated for many different reasons. This paper studies which policy or policy mix is more effective in achieving the socially optimal (modified golden rule) level of aggregate capital stock in an infinite-horizon heterogeneous-agents incomplete-markets economy where capital may be over-accumulated for two distinct reasons: (i) precautionary savings and (ii) production externalities. By solving the Ramsey problem analytically along the entire transitional path, we show that public debt and capital taxation play very distinct roles in ...
Working Papers
, Paper 2020-002
Report
Optimal Income Taxation: Mirrlees Meets Ramsey
Tsujiyama, Hitoshi; Heathcote, Jonathan
(2015-01-22)
What structure of income taxation maximizes the social benefits of redistribution while minimizing the social harm associated with distorting the allocation of labor input? Many authors have advocated scrapping the current tax system, which redistributes primarily via marginal tax rates that rise with income, and replacing it with a flat tax system, in which marginal tax rates are constant and redistribution is achieved via non-means-tested transfers. In this paper we compare alternative tax systems in an environment with distinct roles for public and private insurance. We evaluate ...
Staff Report
, Paper 507
Working Paper
Don’t Tax Capital — Optimal Ramsey Taxation in Heterogeneous Agent Economies with Quasi-Linear Preferences
Wen, Yi; Chien, YiLi
(2019-12-23)
We build a tractable heterogeneous-agent incomplete-markets model with quasi-linear preferences to address a set of long-standing issues in the optimal Ramsey taxation literature. The tractability of our model enables us to analytically prove the existence of a Ramsey steady state and establish several novel results: (i) Depending on the government's capacity to issue debt, there can exist different types of Ramsey steady states but they have the same implications for optimal long-run tax policies. (ii) The optimal capital tax is exclusively zero in a Ramsey steady state regardless of the ...
Working Papers
, Paper 2019-007
FILTER BY year
FILTER BY Bank
Federal Reserve Bank of St. Louis 30 items
Federal Reserve Bank of Atlanta 9 items
Board of Governors of the Federal Reserve System (U.S.) 6 items
Federal Reserve Bank of Minneapolis 5 items
Federal Reserve Bank of Boston 1 items
Federal Reserve Bank of Chicago 1 items
Federal Reserve Bank of Cleveland 1 items
Federal Reserve Bank of Dallas 1 items
Federal Reserve Bank of New York 1 items
Federal Reserve Bank of Philadelphia 1 items
Federal Reserve Bank of San Francisco 1 items
show more (6)
show less
FILTER BY Series
Working Papers 34 items
FRB Atlanta Working Paper 8 items
Finance and Economics Discussion Series 5 items
Opportunity and Inclusive Growth Institute Working Papers 3 items
Working Paper Series 2 items
International Finance Discussion Papers 1 items
Policy Hub 1 items
Review 1 items
Staff Report 1 items
Staff Reports 1 items
show more (5)
show less
FILTER BY Content Type
FILTER BY Author
Chien, YiLi 22 items
Wen, Yi 18 items
Karantounias, Anastasios G. 6 items
Chen, Yunmin 4 items
Chen, Yunmin 3 items
Wu, HsinJung 3 items
Yang, C.C. 3 items
Garriga, Carlos 2 items
Gomis-Porqueras, Pedro 2 items
Gottardi, Piero 2 items
Kajii, Atsushi 2 items
Nakajima, Tomoyuki 2 items
Owyang, Michael T. 2 items
Peterman, William B. 2 items
Waller, Christopher J. 2 items
Badel, Alejandro 1 items
Baker, Steven D. 1 items
Biljanovska, Nina 1 items
Carroll, Daniel R. 1 items
Chen, Daphne 1 items
Colas, Mark 1 items
Conesa, Juan Carlos 1 items
Croce, Mariano 1 items
Daly, Moira 1 items
Debortoli, Davide 1 items
Ferrière, Axelle 1 items
Findeisen, Sebastian 1 items
Fried, Stephie 1 items
Gayle, George-Levi 1 items
Guvenen, Fatih 1 items
Haslag, Joseph H. 1 items
Heathcote, Jonathan 1 items
Hernandez-Murillo, Ruben 1 items
Hollifield, Burton 1 items
Huggett, Mark 1 items
Hur, Sewon 1 items
Kambourov, Gueorgui 1 items
Krebs, Tom 1 items
Kumar, Anil 1 items
Kuruscu, Burhanettin 1 items
Lansing, Kevin J. 1 items
Liang, Che-Yuan 1 items
Markiewicz, Agnieszka 1 items
Martin, Antoine 1 items
Monge-Naranjo, Alexander 1 items
Moser, Christian 1 items
Moyen, Stephane 1 items
Nakajima, Makoto 1 items
Ndiaye, Abdoulaye 1 items
Novan, Kevin 1 items
Nunes, Ricardo 1 items
Nybom, Martin 1 items
Ocampo, Sergio 1 items
Olea de Souza e Silva, Pedro 1 items
Osambela, Emilio 1 items
Pei, Yun 1 items
Pouzo, Demian 1 items
Presno, Ignacio 1 items
Raymond, Stephen 1 items
Sachs, Dominik 1 items
Scheffel, Martin 1 items
Schmid, Lukas 1 items
Shephard, Andrew 1 items
Stähler, Nikolai 1 items
Tsujiyama, Hitoshi 1 items
Vardoulakis, Alexandros 1 items
Winkler, Fabian 1 items
Xie, Zoe 1 items
Yang, C. C. 1 items
Yared, Pierre 1 items
show more (65)
show less
FILTER BY Jel Classification
E62 39 items
H30 22 items
E13 15 items
H63 8 items
E22 7 items
C61 6 items
E21 5 items
D52 4 items
D80 4 items
H23 4 items
E32 3 items
D31 2 items
E52 2 items
E61 2 items
H24 2 items
H27 2 items
H31 2 items
H55 2 items
J22 2 items
J64 2 items
O33 2 items
C14 1 items
C60 1 items
C71 1 items
C72 1 items
D13 1 items
D60 1 items
D82 1 items
D90 1 items
D91 1 items
E20 1 items
E24 1 items
E40 1 items
E43 1 items
E44 1 items
E58 1 items
E60 1 items
F10 1 items
F62 1 items
G01 1 items
G18 1 items
H25 1 items
H32 1 items
H73 1 items
I22 1 items
I24 1 items
I28 1 items
J12 1 items
J24 1 items
J26 1 items
J31 1 items
J65 1 items
O19 1 items
O3 1 items
O31 1 items
O34 1 items
O38 1 items
O40 1 items
R21 1 items
show more (55)
show less
FILTER BY Keywords
Incomplete Markets 22 items
Ramsey Problem 21 items
Capital Taxation 8 items
Optimal taxation 8 items
Heterogeneous Agents 5 items
Modified Golden Rule 5 items
Tax Smoothing 5 items
Optimal Capital Taxation 4 items
Optimal Public Debt 4 items
overlapping generations 4 items
Optimal Fiscal Policy 3 items
Overlapping Generation 3 items
Ramsey taxation 3 items
Role of Public Debt 3 items
ambiguity aversion 3 items
labor tax 3 items
multiplier preferences 3 items
taxation 3 items
Government Bonds 2 items
Optimal Debt 2 items
Optimal Quantity of Debt 2 items
Pollution 2 items
Production Externalities 2 items
Retirement 2 items
Social Security 2 items
Time Inconsistency 2 items
Wealth Distribution. 2 items
austerity 2 items
competitive fringe 2 items
martingale 2 items
misspecification 2 items
Fiscal Policy 2 items
Government debt 2 items
Inequality 2 items
Model uncertainty 2 items
Paternalism 2 items
Unemployment Insurance 2 items
Active-set algorithm 1 items
Capital Income Taxation 1 items
Capital income tax 1 items
Carbon taxation 1 items
Collateral constraint 1 items
College subsidies 1 items
Continuous- Time 1 items
Crowding out 1 items
Default 1 items
Disagreement 1 items
Disaster risk 1 items
Epstein-Zin 1 items
Female labor supply 1 items
Fiat Money 1 items
Financial aid 1 items
Firms location decisions 1 items
Fiscal Union 1 items
Flat tax 1 items
Friedman rule 1 items
Gains from openness Fiscal Constraints. 1 items
Generational accounts 1 items
Government policy 1 items
Heterogeneous discount factors 1 items
Heterogeneous-Agent 1 items
Heterogeneous-Agents 1 items
Housing 1 items
Human Capital 1 items
Immiseration 1 items
Incomplete Market 1 items
Inflation 1 items
International Business Cycles 1 items
International Risk Sharing 1 items
Intertemporal wedges 1 items
Inverse Euler equation 1 items
Labor market risk 1 items
Life Cycle 1 items
Lump-sum Transfers 1 items
Markov-perfect equilibrium 1 items
Mirrlees taxation 1 items
Monetary Policy 1 items
Moral hazard 1 items
Multidimensional screening 1 items
Multinational firms 1 items
Nonnegative martingale 1 items
Optimal Stopping 1 items
Optimal income taxation 1 items
Pigou taxes 1 items
Power law models 1 items
Preference heterogeneity 1 items
Present bias 1 items
Private Information 1 items
Private insurance 1 items
Public Liquidity 1 items
R&D investment 1 items
Ramsey plan 1 items
Ramsey program 1 items
Rate of return heterogeneity 1 items
Savings 1 items
Social insurance 1 items
Social welfare functions 1 items
Tax on capital 1 items
Tax progressivity 1 items
Taxes and labor supply 1 items
Universal Basic Income 1 items
Wealth inequality 1 items
Wealth taxation 1 items
Willingness to pay 1 items
balanced budget 1 items
business cycle 1 items
capital tax 1 items
consumption 1 items
demand uncertainty 1 items
endogenous growth 1 items
excess burden 1 items
fiscal consolidation 1 items
fiscal insurance 1 items
generalized Euler equation 1 items
innovation 1 items
intertemporal elasticity of substitution 1 items
jurisdictions 1 items
labor market 1 items
long-term debt 1 items
monopolist 1 items
optimal reforms 1 items
pessimistic expectations 1 items
profit tax 1 items
public consumption 1 items
public debt 1 items
recursive utility 1 items
robustness 1 items
sovereign default 1 items
spatial separation 1 items
subsidy 1 items
tariffs 1 items
tax competition. 1 items
time-consistency 1 items
time-consistent policy 1 items
uniform commodity taxation 1 items
welfare 1 items
show more (143)
show less