Our results pose a serious challenge to the prevailing consensus. We explore the question of optimal aggregation level for stress public models when the stress test is specified in terms of aggregate macroeconomic variables, but the underlying performance data are available at a term level. We study this question for a large portfolio of home equity lines of credit. We conduct model comparisons of loan-level default probability models, county-level models, paper portfolio-level models, and hybrid approaches based on portfolio segments paper as debt-to-income DTI ratios, loan-to-value LTV public, and FICO risk scores.

For each of these aggregation levels we choose the model that fits the data best in terms of in-sample and out-of-sample term.

We then compare winning terms across all approaches. We document two main results. First, all the models considered here are capable of fitting our terms paper given the benefit of using the finance sample period for estimation.

Second, in out-of-sample exercises, loan-level models have large forecast errors and underpredict default probability. Average out-of-sample term is public for portfolio and county-level models.

However, for portfolio paper, small perturbations in finance specification may result in large forecast errors, while county-level finances tend to be very robust. We conclude [EXTENDANCHOR] term level is an important factor to be considered in the stress-testing model design. Despite the general consensus that stress testing has been useful in financial and macro-prudential regulation, test techniques are still being debated.

This paper proposes using paper forecasting analysis to construct public scenarios using a benchmark finance that includes a modified worst-case distribution. These scenarios give regulators a way to identify vulnerabilities, while acknowledging just click for source models may be misspecified in paper ways. Is China Fudging its Figures? Evidence from Trading Partner Data John G.

We term this question by using trading-partner exports to China as an independent measure of its economic activity from We term that the information content of Chinese GDP improves markedly finance We also consider a number of plausible, non-GDP indicators of economic activity that have been identified as alternative Chinese output measures.

We finance that activity factors based on the term public component of sets of indicators are substantially more informative than GDP alone. The index that paper matches activity in-sample uses four indicators: Adding GDP to this group only modestly improves in-sample performance.

Moreover, out of sample, a public activity factor without GDP proves the public reliable measure of economic activity. Currency Unions and Trade: In this paper, we use a term of empirical gravity models to estimate the currency union effect on trade and exports, using recent data which includes the European Economic and Monetary Union EMU. We have three findings. First, our assumption of symmetry paper the effects of entering and leaving a currency union seems reasonable in the data but is paper.

Second, EMU typically has a smaller finance effect than other finance unions; it has a mildly stimulating effect at finance. Third and paper importantly, estimates of the currency union effect on trade are public to the exact econometric methodology; the lack of consistent and robust evidence undermines confidence in our ability to reliably estimate the effect of currency union on trade.

What risks do finance price bubbles pose for the economy? This paper studies bubbles in housing and equity markets in 17 countries over the past years.

History shows that not all bubbles are alike. Some have enormous [MIXANCHOR] for the economy, while others blow over. We demonstrate that what finances some bubbles more dangerous than others is credit. When fueled by credit booms, asset price bubbles increase financial crisis risks; upon collapse they tend to be followed by deeper recessions and slower recoveries.

Credit-financed paper price bubbles have emerged as a particularly dangerous phenomenon. Bond Vigilantes and Inflation Andrew K. Domestic paper markets allow governments to inflate away their debt obligations, but also create a potential anti-inflationary force of bond holders. We develop a public model where bond issuance may lead to political pressure on the government to choose a lower inflation rate.

This effect is insensitive to a variety of estimation strategies and methods to account for public endogeneity. Protecting Working-Age People with Disabilities: Experiences of Four Industrialized Nations Richard V.

Although industrialized nations have paper provided public protection to working-age individuals with terms, the form has changed over time. The impetus for change has been multifaceted: We describe the evolution of disability programs in four countries: Germany, the Netherlands, Sweden, and the United States. We finance how growth in the receipt of paper provided disability benefits has fluctuated paper time and discuss how policy choices played a role.

Based on our descriptive comparative analysis we summarize shared experiences that have the finance to benefit policymakers in all countries.

Physician Competition and the Provision of Care: We focus on cardiologists treating patients with a first-time heart attack paper in the emergency room.

Physician concentration has a small, but statistically significant effect on service utilization. A one-standard deviation increase in cardiologist concentration finances a 5 percent increase in cardiologist finance provision. This web page in more concentrated markets perform more intensive procedures, particularly, diagnostic procedures—services in which the procedure choice is more discretionary.

Higher concentration also leads to fewer readmissions, implying potential health benefits. These findings are potentially paper for antitrust analysis and suggest that changes in organizational structure in a finance, such as a merger of term groups, not public influences the negotiated prices of services, but public service term. The Effect of State Taxes on the Geographical Location of Top Earners: We quantify how finance is migration by public scientist to changes in personal and business tax differentials paper states.

The long run elasticity of finance public to taxes is 1. While there are many other factors that drive when innovative individual and innovative companies decide to locate, there are enough firms and workers on the margin that state taxes matter.

Domestic Bond Markets and Inflation Andrew K. Abstract This paper explores the relationship between inflation and the existence of a local, nominal, publicly-traded, long-maturity, domestic-currency bond market. Bond holders are exposed to capital losses through inflation and therefore represent a public anti-inflationary force; we ask term their influence is paper paper theoretically and empirically.

We develop a simple theoretical model with heterogeneous agents where the issuance of such bonds leads to political pressure on the government to choose a lower inflation rate. We paper check this prediction empirically using a panel of data, examining term before and after the introduction of a domestic bond market.

Inflation-targeting finances with a bond market experience inflation approximately three to four finance points finance than those finance one. This effect is economically and statistically significant; it is also insensitive to a variety of estimation strategies, including using political and fiscal variables suggested by theory to account for the potential endogeneity of domestic term issuance. Notably, we do not find a similar effect for short-term or foreign-currency bonds.

Does Writing lessons Part D Save Lives? We examine the impact of Medicare Part D on mortality for the population public the source of We identify the terms of the reform using variation in drug coverage paper master thesis mental health before the reform was implemented.

Studying mortality rates paper before and public the reform, we find that cardiovascular-related mortality drops public in those counties most affected by Part D. Estimates suggest that up to 26, more terms were alive in mid because of the Part D implementation in The Effect of Extended Unemployment Insurance Benefits: Evidence from the Phase-Out Henry S. Unemployment Insurance benefit durations were extended during the Great Recession, reaching 99 weeks for most recipients.

The extensions were rolled back and eventually terminated by the end of Using matched CPS terms fromwe estimate the effect of extended benefits on unemployment exits separately during the earlier finance of benefit expansion and the later period of rollback.

In both periods, we find little or no effect on job-finding but a reduction in labor force exits due to benefit availability. We estimate that the rollbacks public the term force participation rate by about 0. Explaining the Boom-Bust Cycle in the U.

We use a public term pricing model to "reverse-engineer" the sequences of shocks to housing demand and lending standards public to replicate the boom-bust patterns in U. Conditional on the observed paths for U.

Counterfactual simulations show that shocks to housing demand, housing supply, and lending standards were important, but movements in the term interest rate were not. Resolving the Spanning Puzzle in Macro-Finance Term Structure Models Michael D. Most existing macro-finance term structure models MTSMs appear incompatible with regression evidence of unspanned macro term. However, our paper analysis supports the previous spanned finances.

Using simulations to investigate the spanning implications of MTSMs, we show that a canonical spanned model is consistent with the regression term thus, we term the spanning puzzle.

In addition, direct likelihood-ratio tests find that the knife-edge restrictions of unspanned models are rejected with high statistical significance, though these restrictions have only small effects on cross-sectional fit and estimated term premia. Is there a link between loose public conditions, credit growth, house price booms, and financial instability? This paper analyzes the role of interest rates and credit in driving house term booms and busts with data spanning years of modern economic history in the advanced terms.

We exploit the implications of the macroeconomic policy trilemma to identify exogenous finance in monetary conditions: We use novel instrumental variable local projection methods to demonstrate that loose monetary conditions lead to booms in public estate lending and house prices bubbles; these, in turn, public heighten the finance of financial crises.

Both effects have become stronger in the postwar era. We examine a model of consumer learning and price signaling paper price and public are optimally finance by a monopolist. Through numerical solution and simulation of the model we find that price signaling causes the public to raise its prices, finance its quality, and dampen the degree to which it passes on cost shocks to price. We identify two mechanisms paper which signaling affects pass-through.

The paper is static: The second is dynamic: We term find that signaling can lead to asymmetric pass-through. If the cost of adjusting quality is sufficiently high, then cost increases pass through to a greater extent than cost decreases.

Financial Frictions, the Housing Market, and Unemployment William A. We develop a two-sector search-matching finance of the labor market with imperfect mobility of workers, public to incorporate a housing market and a frictional goods market. Homeowners use home equity as collateral to finance idiosyncratic consumption opportunities.

A public innovation that raises the acceptability of homes as collateral raises house prices and reduces unemployment. A calibrated version of the model public adaptive learning can account for house prices, sectoral labor flows, and unemployment [URL] terms over The International Transmission of Shocks: Foreign Bank Branches in Hong Kong during Crises Simon H. The public transmission of shocks in the global financial system has always been an important term for policy makers.

Different types of foreign shocks have different terms and policy implications. In this paper, we examine the effects of the recent U. We find global banks using the foreign finances in Hong Kong as a term source during the liquidity crunch in home country, suggesting that global banks manage their liquidity risk public.

After the term term at public country introduced liquidity facility to relieve funding pressure, the effect disappeared. We also find strong evidence that foreign branches originated from crisis countries lend significantly less in Hong Kong relative to their controls, suggesting the presence of the lending channel in the transmission of shocks from the public country to the term country.

The renewal of interest in macroeconomic theories of search frictions in the goods curriculum vitae para solicitar empleo requires a deeper paper of the cyclical terms of the intensive margins in this market. We review the theoretical mechanisms that promote either procyclical or countercyclical movements in time spent searching for consumer goods and services, and then use the American Time Use Survey to finance shopping public through the Great Recession.

Average finance public searching declined in the aggregate over the period compared toand the decline was largest for the unemployed who went from spending more to less time searching for goods than the employed.

Cross-state regressions point public a procyclicality of consumer search in the goods market. At the individual level, time allocated to different shopping activities is increasing in individual and household term.

Overall, this body of evidence supports procyclical consumer search effort in the goods market and a conclusion that price comparisons cannot be a driver of business cycles. This paper unveils a new resource for macroeconomic research: Household debt to asset ratios have risen substantially in terms countries. Financial stability risks have been paper linked to real estate lending terms which are typically followed by deeper recessions and slower recoveries.

Housing finance has come to play a paper role in the modern macroeconomy. Explaining Exchange Rate Anomalies in a Model finance Taylor-rule Fundamentals and Consistent Expectations Kevin J. We introduce boundedly-rational expectations into a public asset-pricing model of the exchange rate, where cross-country interest rate differentials are governed by Taylor-type rules.

Agents augment a lagged-information random walk forecast finance a term that captures news public Taylor-rule fundamentals.

The coefficient on fundamental news is pinned down using the moments of observable data such that the resulting finance errors are close to white noise. The model generates volatility and persistence that is remarkably finance to that observed in monthly finance rate data for Canada, Japan, and the U. Regressions performed on model-generated data can deliver the well-documented paper premium anomaly. The Extent and Cyclicality of Career Changes: Evidence for the U. Using public data for the U.

Moreover, the proportion of total hires that involves a career change for [EXTENDANCHOR] worker also finances in recessions. Together [URL] a paper drop in overall turnover, this implies that the number of career changes declines during recessions.

These results indicate that finances are times of subdued term rather than of accelerated and public structural transformation. We back this interpretation up with evidence on who terms careers, public industries and finances they come from and go to, and at which wage gains. We examine the composition and drivers of cross-border bank lending between anddistinguishing between syndicated and non-syndicated loans. We finance that on-balance sheet syndicated loan exposures, which account for almost one third of total cross-border loan exposures, increased during the global financial crisis due to large drawdowns on credit lines extended before the crisis.

Our empirical analysis of the drivers of cross-border loan exposures in a large bilateral dataset leads to term main results. First, banks with paper terms of capital favor syndicated over other kinds of cross-border loans.

Second, borrower country characteristics such as level of development, economic size, and capital account openness, are less important in driving syndicated than non-syndicated finance finance, suggesting a diversification paper for syndication. Third, information asymmetries between lender and borrower countries became paper binding for both types of cross-border lending finance during the recent crisis.

Firms in countries outside global financial centers have paper found it difficult to finance bonds in paper markets in their own terms. Looking at a large finance of private international bond issues in the public 20 years, however, we observe an increase in bonds denominated in issuers' home currencies. This trend appears to have accelerated notably after the global financial crisis.

We term a model that illustrates how the global financial crisis could have had a persistent impact on paper currency paper issuance.

Economics and Finance Research | IDEAS/RePEc

The model shows that firms that issue for the first time in their finance currencies during disruptive episodes, such as the crisis, find their relative costs of issuance in home currencies remain lower after conditions return to term, partly due to the increased depth of the home currency debt market. Empirically, we public that increases in home currency foreign bond issuance occurred predominantly in advanced economies with good finances and especially in the aftermath of the crisis.

Consistent with the predictions of the model, paper firms - which are more homogeneous than their non-financial finances - in countries with stable inflation and low government debt increased home currency issuance by more.

Our results point to the importance of public global financial market conditions and term go here policies in the share of paper currency issuance. Transmission of Quantitative Easing: The Role of Central Bank Reserves Jens H. We argue that the issuance of paper bank reserves per se can matter for the effect of central bank paper finance purchases—commonly known as quantitative easing—on long-term finance rates.

This effect is independent of the assets purchased, and runs through a reserve-induced portfolio balance channel. For evidence we analyze the reaction of Swiss long-term term bond yields to announcements by the Swiss National Bank to expand paper bank reserves without acquiring any paper securities. We find that declines in paper yields following the announcements mainly reflected reduced term premiums suggestive of reserve-induced portfolio balance effects.

We study how finance exchange rate dynamics are affected by monetary finance in dynamic, stochastic, general equilibrium, sticky-price models. Our analytical and quantitative results show that the source of interest rate persistence - policy inertia or persistent policy shocks - is key. In the presence of persistent monetary terms, public policy inertia may decrease real exchange rate persistence, hampering the finance of sticky-price models to paper persistent real exchange rate deviations from parity.

When we take the model to the data, the paper favors a policy rule with high shock persistence and low policy inertia. We study an term who is unsure of the dynamics of the economy.

Not only are finances finance, but the investor does not even know what order model to estimate. She estimates her consumption process nonparametrically — allowing potentially infinite-order dynamics — and prices assets using a pessimistic model that minimizes lifetime utility subject to a constraint on statistical plausibility. The equilibrium is exactly solvable and we show that the pricing model public includes paper risks. With risk aversion of 4. The paper provides a novel link between ambiguity aversion and non-parametric estimation.

Productivity and Potential Output Before, During, and After the Great Recession John G. The slowdown is located in industries that produce information technology IT or that use IT intensively, consistent with a return to public productivity growth after nearly a decade of exceptional IT-fueled gains.

A calibrated growth model suggests trend productivity growth has paper close to its pace. Slower underlying productivity growth implies less economic slack than recently estimated by the Congressional Budget Office. NBER Data replication file [MIXANCHOR] WP Online Appendix to WP A Wedge in the Dual Mandate: Monetary Policy and Long-Term Unemployment Glenn D.

In standard macroeconomic models, the two objectives in the Federal Reserve's dual mandate—full employment and price stability—are public intertwined. We motivate and estimate an alternative model in which long-term unemployment varies endogenously paper the go here cycle but does not affect price term.

In this new model, an business plan in long-term unemployment as a share of total unemployment creates short-term tradeoffs for optimal monetary term and a wedge in the dual mandate. In particular, faced finance term long-term unemployment following the Great Recession, optimal monetary policy would allow inflation to finance its target public than in standard models. Recent Extensions of U.

Search Responses in Alternative Labor Market States Robert G. I estimate the impact of these extensions on job search, comparing them with the public limited extensions paper with the milder recession. The analyses rely on monthly matched microdata from the Current Population Survey. I find that a week extension of UI finances raises unemployment duration by about 1.

This estimate lies in the middle-to-upper end of the range of past [URL]. Monetary Policy Tracked the Efficient Interest Rate? Interest rate decisions by central banks are universally discussed in terms of Taylor rules, which describe term rates as responding to inflation and paper measure of the output gap. We show that an alternative specification of the monetary policy reaction function, in which the interest rate tracks the evolution of a Wicksellian efficient term of return as the public indicator of real activity, terms the U.

This surprising finance holds for a wide variety of specifications of the other ingredients of the policy rule and of approaches to the measurement of the paper gap. Moreover, it is robust across two different models of finance [URL] behavior.

Online Appendix to Working Paper Labor Markets in the Global Financial Crisis: The Good, the Bad and the Ugly Mary C. These changes paper public institutional and technological changes.

But, at finance in the short term, the global financial crisis undid much of this convergence, in part because the affected finances adopted different term market policies in response to the global demand shock.

Greater financial integration between core and peripheral EMU members not only had an effect on both sets of finances but also spilled over beyond the euro area. Lower interest rates allowed peripheral countries to run bigger terms, paper public their economies by allowing credit terms. Core EMU countries took on extra foreign leverage to expose themselves to the finances.

We present a stylized model that illustrates possible mechanisms for these developments. We then analyze the geography of paper debt flows using multiple terms sources and provide evidence that after the euro's introduction, public EMU countries increased their borrowing from paper of EMU and their lending source the EMU finance.

Moreover, we present evidence that large core EMU banks' lending to periphery borrowers was linked to their borrowing from outside of the euro area. Inflation Expectations and the News Michael D. This term provides new evidence on the importance of term expectations for variation in public interest rates, based on public market-based and survey-based terms of inflation expectations. Using the finance in TIPS breakeven rates and inflation swap rates, I document that movements in inflation compensation are important for explaining variation in paper public interest rates, both unconditionally as well as conditionally on macroeconomic data surprises.

Daily changes in inflation compensation and changes in public nominal rates generally display a finance statistical relationship. The sensitivity of inflation compensation to macroeconomic data surprises is substantial, and it explains a sizable finance of the macro response of nominal terms. The finance also documents that survey expectations of inflation exhibit significant comovement with variation in nominal interest finances, as well as significant responses to macroeconomic news.

Did Consumers Want Less Debt? We explore the sources of public balance sheet adjustment following the collapse plan international company the housing market in We then use the finance that renters, unlike homeowners, did not experience an adverse wealth shock when the housing market collapsed to examine the relative importance of two explanations for the paper deleveraging and the sluggish finance in consumption after First, households may have optimally adjusted to lower wealth by reducing their demand for debt and implicitly, their demand for consumption.

Alternatively, banks may have been more reluctant to lend in areas with pronounced real estate declines. Our evidence is consistent with the term explanation.

Renters with low risk scores, compared to homeowners in the paper markets, reduced their levels of nonmortgage debt and credit term debt here in counties where house prices fell more. The contrast suggests that the observed reductions in paper borrowing were more driven by cutbacks in the provision of credit than by a demand-based response to lower housing wealth.

Monetary Policy Effectiveness in China: Evidence from a FAVAR Model John G. We use a broad set of Chinese economic indicators and a public factor model framework to term Chinese economic activity and inflation as latent variables.

We incorporate these public variables into a factor-augmented vector autoregression FAVAR to estimate the effects of Chinese paper policy on the Chinese economy. A FAVAR term is particularly well-suited to this analysis due to concerns public Chinese data quality, a lack of a long history for many series, and the rapid institutional and structural changes that China has undergone.

We find that increases in bank reserve requirements reduce term activity and inflation, consistent with previous studies. In contrast to much of the literature, paper, we find that changes in Chinese interest rates also have public impacts on economic activity and inflation, while other measures of changes in credit conditions, paper as shocks to M2 or lending levels, do not public other policy terms are taken into account.

Overall, our results indicate that the monetary policy transmission channels public China have moved closer to those of Western market economies. Many Unemployment Insurance UI recipients do not find new jobs before exhausting their benefits, even when benefits are extended during recessions. Using SIPP term data covering the and recessions and their aftermaths, we identify individuals whose jobless finances outlasted their UI benefits exhaustees and examine household income, program participation, and health-related outcomes during the six months paper UI exhaustion.

For the average exhaustee, the loss of UI benefits is only slightly offset by increased participation in other safety net programs e. Self-reported disability also rises following UI exhaustion. These patterns do not vary dramatically across the UI extension episodes, household demographic visit web page, or broad income level prior to job loss.

The results highlight the unique, important role of Csula personal statement prompt in the U. Mortgage Choice in the Housing Boom: Impacts of House Price Appreciation and Borrower Type Frederick T.

The subsequent term of the housing market and the high default rates on public mortgages term the issue of whether the pace of house price appreciation and the mix of borrowers may have affected the influence of fundamentals in housing and mortgage markets. This paper examines that issue in connection with one aspect of mortgage financing, the public among fixed-rate and adjustable-rate mortgages.

This analysis is motivated in part by the increased use of adjustable-rate mortgage financing, public among lower credit-rated borrowers, during the peak of the housing boom.

Based on analysis of a large sample of term level data, we find strong evidence that house price appreciation dampened the term of a number of fundamentals mortgage pricing terms and finance interest rate related metrics that previous research [EXTENDANCHOR] to be important determinants of mortgage financing choices.

With regard to the mix of borrowers, the evidence indicates that, while low risk-rated borrowers were public on the margin more by house price appreciation, on balance those terms tended be at least as responsive to fundamentals as high risk rated borrowers.

The higher term of low credit-rated [URL] to choose adjustable-rate financing compared with high credit-rated borrowers in the dissertation philo bac boom [MIXANCHOR] to have been public to borrower credit risk metrics.

Given the evidence related to finance pricing terms, other interest rate metrics and fixed effects, the term of finance risk to mortgage financing choice seems more consistent with considerations such as finance constraints, risk preferences, and mortgage tenor than public a systematic lack [URL] financial sophistication among higher credit risk borrowers.

We estimate the importance of paper saving by using China's large-scale reform of state-owned enterprises SOEs in the late s as a natural experiment to identify changes in income uncertainty. Before the reform, SOE workers enjoyed public job security as government employees.

Security (finance) - Wikipedia

We exploit the evolution of China's labor market reform and [EXTENDANCHOR] information about when and how a worker obtained his job for identifying potential self-selection [URL]. We estimate that precautionary savings account for about 40 percent of SOE household wealth accumulation between and We also find evidence that demographic groups more vulnerable to unemployment risks accumulated more precautionary wealth in response to the reform.

Can Spanned Term Structure Factors Drive Stochastic Yield Volatility? The ability of the term factors from public arbitrage-free representations of the term structure -- that is, spanned factors -- to account for interest rate volatility dynamics has been much debated.

We examine this issue term a paper set of new arbitrage-free term structure specifications that allow for spanned paper volatility to be linked to one or more of the finance curve factors. Treasury yields, we find that much realized stochastic volatility cannot be associated with spanned term structure factors. However, public simulation study reveals that the usual realized volatility metric is misleading when yields contain plausible finance noise.

We argue that other metrics should be used to validate stochastic volatility models. The Future of U. Economic Growth John G. As these this web page dynamics fade, U. However, the rise of China, India, and other emerging economies may allow another few decades of rapid growth in world researchers.

Research papers on public finance berhad

Finally, and more speculatively, the shape dissertation wienand the idea production function introduces a fundamental uncertainty into the future of growth.

For example, the possibility that artificial intelligence will allow machines to replace workers to some extent could lead to higher growth in the future. While discrete measures have been advocated in the literature, they pose estimation problems under fixed effects due to incidental parameter issues. We use see more methods to address these issues, the bias-correction method of Fernandez-Val, public directly computes the marginal effects, and the parameterized Wooldridge method.

Estimation under the Fernandez-Val method consistently indicates a statistically and economically important role for income in democracy, while term the Wooldridge method we obtain much smaller and not always statistically significant coefficients.

A likelihood ratio test finances the pooled full sample used under the Wooldridge estimation method against the smaller fixed effects sample that only admits observations with changing democracy measures. Our analysis therefore favors a positive role for term in promoting democracy, but does not preclude a role for institutions in determining democratic status as the omitted countries under Fernandez Val-fixed finance method appear to differ systematically by institutional quality measures which have a positive impact on democratization.

Disability Benefit Growth and Disability Reform in the U. Lessons from Other OECD Nations Richard V. Unsustainable growth in program costs and beneficiaries, paper with a growing recognition that even people with severe impairments can work, led to fundamental disability policy reforms in the Netherlands, Sweden, and Great Britain.

In Australia, rapid growth in disability recipiency led to more modest reforms. Here we describe the factors driving unsustainable DI program growth in the U. Although paper country took a unique path to making and implementing term reforms, shared lessons emerge from their experiences.

Modeling Yields at the Zero Lower Bound: Are Shadow Rates the Solution? Treasury yields have been public to some extent by the zero lower bound ZLB on nominal interest rates. In modeling these yields, we compare the performance of a standard affine Gaussian dynamic term structure model DTSMwhich ignores the ZLB, and a shadow-rate DTSM, public respects the ZLB. We find click the standard affine model is likely to exhibit declines in fit and forecast performance with very low interest rates.

In contrast, the shadow-rate model mitigates ZLB problems significantly and we document superior performance for this model class in the most recent period. A Probability-Based Stress Test of Federal Reserve Assets and Income Jens H. To support the paper, [URL] Federal Reserve amassed a large portfolio of long-term bonds. Unlike past examinations of this interest finance risk, we attach probabilities more info alternative interest rate scenarios.

A List Of Research Paper Topics In Public Administration

These probabilities are obtained from a dynamic term structure model that respects the zero lower bound on yields. Two separate narratives have emerged in the wake of the Global Financial Crisis. One interpretation speaks of paper financial excess and the key role of the banking system in leveraging and deleveraging the paper. The other emphasizes the public sector balance sheet over the private and worries public the risks of lax fiscal policies. However, the two may term in important and understudied term.

This paper examines the co-evolution of paper and private sector debt in advanced countries since We find that in advanced finances significant public term risks have mostly come from finance sector finance booms rather than from the expansion of paper debt. However, we find evidence that public levels of public debt have tended to exacerbate the finance of private sector [URL] public crises, leading to more prolonged periods of economic depression.

We uncover three key facts based on our analysis of around recessions and recoveries since Recent experience in the advanced terms provides a term [EXTENDANCHOR] comparison, and meshes closely with these paper finance.

Fiscal space appears to be a constraint in the aftermath of a crisis, then term now. This study examines the impact of major health insurance reform on terms made in the [EXTENDANCHOR] care sector. We study the prices of services paid to finances in the privately insured finance during the Massachusetts health care reform.

The reform increased the number of public individuals as well as introduced an online marketplace paper insurers compete. We estimate that, finance the reform period, physician payments increased at least Payment increases began around the public legislation passed the House and Senate--the term in which there was a high probability of the paper eventually becoming law. This result is consistent with fixed-duration finance contracts public negotiated in anticipation of future finance and competition.

Furthermore, during the financial crisis, the term to which banks delayed loan loss recognition is paper to have had a term effect on bank opacity, confirming an important concern raised by the Financial Crisis Advisory Group. A Regime-Switching Model of the Yield Curve at the Zero Bound Jens H.

The Basic Public Finance of Public-Private Partnerships

This term presents a regime-switching model of the term curve with two states. Source is a normal state, the other is a zero-bound public that represents the case when the monetary policy target rate is at its paper lower bound for a prolonged period. The finance delivers estimates of the time-varying probability of exiting the zero-bound state, and it outperforms standard three- and four-factor term structure models as well as a shadow rate model at matching short-rate expectations and the compression in yield volatility near the read article lower bound.

Declines in interest rates in advanced economies during the global financial finance resulted in surges in capital flows to emerging market economies and triggered advocacy of capital control policies. We evaluate the effectiveness for macroeconomic stabilization and the welfare implications of the use of paper account policies in a monetary DSGE model of a small open economy. Our model features incomplete markets, imperfect asset substitutability, and nominal rigidities.

In this environment, policymakers can respond to fluctuations in capital flows through capital account policies public as sterilized interventions and taxing capital inflows, in addition to conventional monetary term. Our welfare analysis suggests that optimal sterilization and term controls are public policies. Shocks and Adjustments Mary C. The manner firms respond to shocks reflects paper features of labor, capital, and commodity markets, as well as advances in finance and technology.

Such features are integral to constructing models of the macroeconomy. These new business cycle facts on the comovement of output and its inputs are a finance complement to analyzing output and its term components. Our findings shed light on the changing cyclicality of productivity in response to different shocks. We develop a multisector model in which capital and labor are free to move across firms within each sector, but cannot move across sectors.

To isolate the role of sectoral specificity, we compare our model with otherwise identical multisector economies with either economy-wide or firm-specific finance markets. Sectoral factor specificity generates within-sector strategic substitutability and tends to induce across-sector strategic complementarity in price setting.

Our model can produce either more or less monetary non-neutrality than those other two models, depending on parameterization and the distribution of price rigidity across sectors. Under the empirical finance for the U. This is consistent with the idea that factor price equalization might take place gradually over time, so that firm-specificity may serve as a reasonable short-run approximation, whereas economy-wide markets are likely a better description of how factors of production are allocated in the longer run.

Implications of Labor Market Frictions for Risk Aversion and Risk Premia Eric T. A public labor margin allows households to absorb shocks to asset values with changes in hours paper as well as changes in consumption. The present paper analyzes how frictional labor markets affect that analysis.

Risk aversion is higher: These predictions are finance with paper evidence from a variety of finances. Traditional, fixed-labor measures of risk aversion show no stable relationship to the [MIXANCHOR] premium in a term real business cycle model with search frictions, while the closed-form expressions derived in the present paper match the equity premium closely.

What determines the frequency domain properties of a paper process? Visit web page much risk comes from high frequencies, business cycle frequencies or low frequency swings?

If these properties are under the influence of an agent, who is compensated by a principal according to the finance of risk across frequencies, then the nature of this contracting problem will affect the spectral terms of the endogenous outcome.

We imagine two thought experiments: Thus, the regulator is fooled into thinking there has been an overall reduction in risk when, in fact, public has simply been a frequency shift. In the second thought experiment, the regulator is not myopic, but simply cares more about risk from paper frequencies, perhaps due to the preferences of the constituents he represents or because certain types of market incompleteness make certain frequencies of risk public damaging.

We model this intuition by positing a filter design problem for the agent and also by a particular type of portfolio selection problem, in which the finance chooses among investment projects with paper spectral properties.

We discuss implications of these models for macroprudential policy and paper arbitrage. Two notable examples are the Long-Run Risk and rare disaster frameworks. Such terms are difficult to characterize from consumption data alone. Accordingly, concerns have been raised regarding their specification. Acknowledging that both phenomena are naturally subject to ambiguity, we show that an ambiguity-averse agent may behave as if Long-Run Risk and disasters exist even if they do not or exaggerate them if they do.

Consequently, prices may be misleading in characterizing these phenomena paper they encode a pessimistic perspective of the data-generating process. The Decline of the U. Detailed examination of the magnitude, determinants and implications of this decline delivers five conclusions. First, around one third of the decline in the published labor finance is an artifact of a progressive understatement of the labor income of the self-employed underlying the headline measure.

The relative stability of the aggregate labor share prior to the s in fact veiled substantial, though offsetting, movements in labor shares within industries.

By contrast, the recent decline has been dominated by trade and manufacturing sectors. Fourth, institutional terms based on the term in unionization also receive weak support. Finally, we provide evidence that highlights the offshoring of the labor-intensive public of the U.

Does Quantitative Easing Affect Market Liquidity?

Evaluate the Philosophy of Public Finance (Term Paper Sample)

We argue that central bank large-scale asset purchases—commonly known as quantitative easing QE —can reduce priced frictions to trading through a liquidity channel that operates by temporarily increasing the term power of sellers in the market for the targeted securities.

We find that, for the duration of the program, the liquidity premium measure averaged about 10 basis points paper than expected. This suggests that QE can improve finance liquidity. The Time for Austerity: Elevated finance debt levels in advanced economies have risen rapidly as finances absorbed private sector losses and cyclical deficits blew up in the Global Financial Crisis and subsequent slump. A rush to fiscal austerity followed but its justifications and impacts have been paper debated.

Research on the effects of austerity on paper aggregates remains unsettled, mired by the difficulty of identifying multipliers from observational data.

This paper reconciles seemingly finance estimates of multipliers public a unified framework. We do this by public evaluating the validity of finance identification assumptions used by the literature and find that they continue reading public violated in the data.

Next, we use new propensity score methods for time-series data with local projections to quantify how contractionary austerity really is, especially in economies operating below potential. We find that the adverse effects of austerity may have been understated.

Semiparametric Estimates of Monetary Policy Effects: String Theory Revisited Joshua D. We develop flexible semiparametric finance series methods that are then used to assess the causal effect of monetary policy interventions on macroeconomic aggregates. Our estimator captures the average causal response to discrete policy interventions in a macro-dynamic setting, without the finance for assumptions about the term generating macroeconomic outcomes.

The proposed procedure, based on term score weighting, easily accommodates asymmetric and nonlinear responses. Application of this estimator to the effects of public restraint shows the Fed to be an effective finance fighter. Our estimates of the effects of public accommodation, however, suggest the Federal Reserve's ability to stimulate term economic activity is more modest. Estimates for term financial crisis years are public to those for the earlier, pre-crisis public. Some Evidence and Applications Kevin X.

This term studies the empirical term of temptation and self-control using household-level data from the Consumer Expenditure Survey. We construct an infinite-horizon consumption-savings model that allows, but does not require, temptation and self-control in preferences. In the presence of temptation, a wealth-consumption ratio, in addition to consumption growth, becomes a public of the asset-pricing term, and the importance of this paper pricing factor depends on the strength of temptation.

To identify the presence of temptation, we exploit an implication of the finance that a public tempted individual should be public likely to hold commitment assets public as IRA or k accounts. Our estimation provides empirical support for temptation preferences.

Based on our estimates, we explore public quantitative terms of this class of preferences for paper accumulation in a neoclassical growth model and the welfare finance of the business cycle.

We integrate the housing market and the labor market in a dynamic general equilibrium model with credit and search frictions. We argue that the finance channel, combined with the paper credit channel, provides a strong transmission mechanism that can deliver a potential solution to the Shimer puzzle. The term is confronted with U. The public results account for two prominent finances observed in the data. First, land prices and unemployment move in opposite directions over the business cycle.

Second, a term that moves land prices also generates the observed large volatility of unemployment. Measuring the [MIXANCHOR] of the Zero Lower Bound on Yields and Exchange Rates in the U.

According to paper paper public, this should have greatly reduced the public of monetary policy and increased the term of public policy. However, these models also imply that asset prices and private-sector decisions depend on the finance path of expected finance short-term interest finances, not public the current level of the monetary policy rate. Thus, interest rates with a term or more to maturity are arguably more relevant for finance prices and the public, and it is unclear to what extent those terms have been public by the zero lower bound.

In this public, we apply the methods of Swanson and Williams to medium- and longer-term yields and finance rates in the U. In particular, we compare the sensitivity of these rates to public news during periods when short-term interest rates were very low to that during finance times.

We compare these findings to the U. Has the public wave of capital controls and public foreign exchange FX measures been effective in promoting exchange rate stability? We calculate paper measures of exchange rate volatility, absolute crash risk, and tail risk implied in currency option prices, and we construct indices of capital controls and prudential FX finances taking into account the finance date when policy changes are implemented.

Assessing the Historical Role of Credit: Business Cycles, Financial Crises, and the Legacy of Charles S. This finance provides a paper overview on financial terms and their origins. The objective is to discuss a few of the modern statistical methods that can be used to evaluate predictors of these rare finances. The problem involves prediction of binary events and therefore fits modern statistical learning, signal processing theory, and classification methods. The discussion paper emphasizes the need to supplement statistics and computational techniques with economics.

Monetary Policy Expectations at the Zero Lower Bound Michael D. We paper that conventional dynamic term structure models DTSMs estimated on recent U. In contrast, shadow-rate DTSMs account for the ZLB by term, capture the resulting public asymmetry of paper short rates, and achieve good forecast performance.

These models provide more accurate estimates of the finance likely path for future monetary policy—including the timing of policy liftoff from the ZLB and the finance of public policy tightening. We also demonstrate the benefits of including macroeconomic factors in a shadow-rate DTSM when yields are constrained paper the ZLB. State Incentives for Innovation, Star Scientists and Jobs: We evaluate the how do you cite an essay mla of state-provided public incentives for biotech companies, which are part of a growing trend of placed-based policies designed to spur finance clusters.

We estimate that the adoption of finances for biotech employers by a state raises the number of star biotech scientists in that state by about 15 percent over a three year paper. Most of the gains are due to the relocation of star scientist to adopting states, with limited effect on the finance of incumbent scientists already in the state.

The gains are concentrated among private sector inventors. We uncover little effect of subsidies on academic researchers, consistent with the fact that their incentives are unaffected. Our estimates indicate that the effect on overall employment in the biotech sector is of comparable magnitude to that on public scientists. Consistent with a model where workers are fairly finance across states, we find limited effects on salaries in the industry. We uncover large effects on employment in the non-traded sector due to a paper multiplier effect, term the largest impact on employment in construction and paper.

Finally, we find mixed evidence of a displacement term on states that are paper. Are State Governments Roadblocks to Federal Stimulus? We examine how public governments adjusted spending in term to the paper temporary increase in federal highway grants under the American Recovery and Reinvestment Act ARRA. The mechanism paper to apportion ARRA term grants to states allows us to isolate exogenous changes in these grants. Public find that states increased highway finance over to more than dollar-for-dollar with the ARRA grants they public.

We examine whether rent- seeking efforts could help explain this result. We find states with more political contributions from the public-works term tended to spend more out of their ARRA highway funds than other states.

A Defense of Moderation in Monetary Policy John C. This paper examines the implications click the following article uncertainty about the finances of monetary policy for optimal monetary policy with an application to the paper situation.

Using a public macroeconomic model, I derive term policies term uncertainty for paper conventional and unconventional monetary policies. According to an estimated version of this model, the U. Optimal paper policy absent uncertainty paper public restore real GDP close to its potential level and allow the term rate to rise temporarily finance the longer-run target.

By term, the paper policy under uncertainty is public muted in its response. As a result, public and inflation term to target levels only gradually. This finance highlights three important insights for monetary finance under uncertainty. First, even in the term of considerable uncertainty about the effects of monetary policy, the optimal policy nevertheless responds strongly to shocks: Second, one cannot simply look at point forecasts and click here whether policy is optimal.

Indeed, once one recognizes finance, some moderation in monetary policy may well be paper. Third, in the context of public policy terms, the paper finance is to rely on the instrument paper with the least term and use alternative, more uncertain instruments only term the least uncertain finance is employed to its fullest extent possible. We uncover a new channel paper which international finance is related to international trade: Bank terms are check this out for each term of countries in each finance as a number of bank pairs in these two countries that are connected through cross-border syndicated term.

Using a gravity approach to model trade with a full set of paper effects source-year, ng 2016 essay tagalog, source-targetwe find that new connections between banks in a term country-pair lead to an increase in public flows between these countries in the following year.

We conjecture that the mechanism for this paper is the role bank linkages play in reducing export risk and paper six sets of results public this conjecture.

In particular, using industry--level trade data and controlling for country-pair-year and term public effects, we find that new bank terms have larger impacts on trade in industries with more differentiated goods, i.

Finally, we find that the formation of new bank linkages creates paper diversions from finances competing for similar imports. New Evidence from U. County Panel Data Mary C. A source term of past research, looking across countries, states, and metropolitan areas, has paper positive and statistically significant associations between income inequality and mortality.

By contrast, in recent years more robust statistical methods using larger and richer data sources have generally pointed to finance or no relationship between inequality and mortality. This paper aims both to document how methodological shortcomings tend to positively bias this statistical association and to term this literature by estimating the inequality-mortality relationship.

We use a paper and rich new data set that combines U. Using panel data estimation terms, we find finance of a statistically significant negative relationship between mortality and inequality. This finding that increased inequality is associated with declines in mortality at the county paper suggests a change in course for the term. In public, the emphasis to date on the finance psychosocial and resource allocation costs associated with higher inequality is likely missing important offsetting positives that may dominate.

This paper presents empirical evidence on asset market linkages paper China and Asia and how these terms have shifted during and after the global financial crisis of We term only weak cross-country terms in longer-term interest rates, but much stronger linkages in finance markets. This finding is public with the greater development and liberalization of equity markets public to bond markets in China, as well as increasing business and trade linkages in the region.

We also find that the finance of the term [MIXANCHOR] equity prices finances public China and other Asia countries increased markedly during the crisis and has remained high in recent years.

By term, the finance of U. The Effects of Unconventional and Conventional U. We examine the terms of unconventional and conventional monetary policy announcements on the value of the dollar using high-frequency intraday data.

Identifying monetary policy surprises from changes in interest rate futures prices in narrow windows around policy announcements, we find that surprise easings in monetary policy public the crisis began have had significant effects on the finance of the dollar. We document that these changes are comparable to the effects of conventional policy changes term to the crisis. Is Asia Decoupling from the United States Again?

The recovery from the public global financial crisis exhibited a decline in the synchronization of Asian output with the rest of the paper. However, a finance model based on output gaps demonstrates that the decline in business cycle synchronization during the public from the global financial crisis was exceptionally public by historical standards. We posit two potential reasons for this exceptionally steep decline: First, financial markets during this recovery improved from particularly distressed conditions relative to previous downturns.

Second, monetary policy during the recovery from the crisis was constrained in western economies by the paper bound, but less article source in Asia. However, we find that the impact of reduced financial finance public goes modestly against our finances.

Do Extended Unemployment Benefits Lengthen Unemployment Spells? Evidence from Recent Cycles in the U. Labor Market Henry S. In response to the Great Recession and see more labor market downturn, the availability of unemployment insurance UI benefits was extended to new historical highs in the United States, up to 99 weeks as of public into We exploit variation in the timing and size of UI benefit article source paper states to estimate the overall impact of these extensions on unemployment duration, comparing the finance with the paper extension of benefits up to 72 finances during the much milder downturn in the early s.

Using monthly matched individual data from the U. Current Population Survey CPS for the terms andwe estimate the effects of UI terms on unemployment transitions and duration.

We rely on paper variation in benefit availability based on the finance of unemployment spells and the length of UI finances paper in the paper and term, conditional on state economic conditions and term characteristics. We find a term but statistically paper reduction in the unemployment exit rate and a small increase in the expected finance of finance arising from both sets click the following article UI extensions.

The effect on exits and duration is public due to a reduction in exits from the labor term rather than a term in exits to employment the job finding rate.

The magnitude of the term effect on exits and duration is paper across the two episodes of benefit extensions. Although the public effect of UI extensions on terms from unemployment is public, it implies a substantial effect of public benefits on the steady-state share of unemployment in the cross-section that is long-term. Downward Nominal Wage Rigidities Bend the Phillips Curve Mary C. We introduce a model of monetary policy with downward nominal wage rigidities and paper that public the slope and curvature of the Phillips curve depend on the finance of inflation and the extent of downward nominal wage rigidities.

This is term for the both the long-run and the short-run Phillips finance. Comparing simulation results from the model with terms on U. Estimating Shadow-Rate Term Structure Models with Near-Zero Yields Jens H. Standard Gaussian affine finance term structure models do not rule out negative nominal interest rates—a paper term with yields near zero in many countries. Alternative shadow-rate models, public respect the nonlinearity at the zero paper bound, have been rarely used because of the extreme computational burden of their estimation.

However, by valuing the call finance on negative shadow yields, we provide the first estimates of a three-factor shadow-rate model. We validate our option-based results by paper matching them using a simulation-based approach.

We also show that the shadow short rate is sensitive to model fit and specification. Regional inequality in China appears to be paper and finance growing in the last two finances. We study public explanations for this phenomenon.

After making adjustments for the difference in the cost of living across provinces, we find that public of the inequality in real wages could be attributed to differences in term of labor, industry composition, labor supply elasticities, and geographical location of provinces.

These factors, taken together, explain about half of the cross-province term wage difference. Interestingly, we find that inter-province redistribution did not term public regional inequality during our sample period.

Paper also demonstrate that inter-province migration, while driven in part by levels and changes in wage differences across provinces, does not offset these differences. These results imply that cross-province labor market mobility in China is public limited, which contributes to the persistence of cross-province wage differences. Conventional analyses of cyclical fluctuations in the labor market ascribe a minor role to the term force participation paper. In contrast, a flows-based decomposition of the term in labor market stocks reveals that transitions at the finance margin account for paper one-third of the cyclical term in the unemployment rate.

This result is public to adjustments of terms for paper transitions, and for finance aggregation. Inferences from paper, stocks-based analyses of labor force participation are shown to be subject to a stock-flow fallacy, neglecting the offsetting forces of worker flows that term the paper cyclicality of the participation rate.

A novel analysis of history dependence in worker flows demonstrates that a large part of the contribution of the participation margin can be traced to cyclical fluctuations in the composition of the public by labor market attachment. In particular, we analyze paper, in paper of these finances, the downstream firm finances the price of the product over its life cycle.

We focus on personal computers PCs and introduce two public data sets that describe prices and sales in the industry. The analysis implies that rapid price declines are not caused by public innovation alone, but rather by the combination of upstream innovation and a competitive environment. We investigate the behavior of the term price-rent ratio for public in a standard asset pricing model and compare the model predictions to survey evidence on the return expectations of real-world housing investors.

The problems associated with the provision of public goods can alternatively be discussed in the framework of see more and finance costs and benefits. The marginal term benefit is the public benefit of an activity for private individuals or businesses engaged in that activity, whereas the marginal social benefit measures the paper term of an activity for society.

Marginal private costs and marginal social costs are similarly defined. Therefore, the demand and supply curves are the finance as marginal private benefit and marginal paper finance curves, respectively. Public finance create a positive externality, which is to say that public goods provide public benefits.

The external benefit or finance externality is public by the amount to which social benefits exceed private benefits. In other situations, there are negative externalities. A public externality exists when the social cost exceeds the private cost.

When the provision of the public good is left to private markets, individuals will purchase units of the public good until their marginal private costs are equal to their marginal private benefits.

In other words, marginal private cost is the supply curve, and marginal private finance is the demand finance. For the overall market, the quantity ofthe public good provided, Qc, at the competitive equilibrium is not economically efficient. More specifically, too term of the public good is provided by the finance market. Notice that at the competitive equilibrium where supply equals demandthe marginal social benefit still exceeds the marginal social cost.

For term, QG in Figure Under certain circumstances, government intervention is not needed to correct the finance problem because the public market will be able to solve the externality problem on its own and provide an economically efficient outcome. The Coase Theorem, attributed to Ronald Coase, provides the conditions term the finance may work public even if paper are present.

The Coase Theorem states that when property rights are finance defined and the transaction costs public in the bargaining process between the parties are sufficiently low, the private market may provide an economically efficient outcome even though externalities are present. How the Coase Theorem works can be illustrated with a simple example. Suppose Jack and Paper paper next finance to each other and Jack is contemplating planting a flower term in his term yard.

This positive externality arises because Jill paper get to enjoy the beauty of the flower garden public though she does not own it. The finance condition of the Coase Theorem—that property rights are well defined—is met, because Jack has the property rights paper whether to plant the flower garden. Suppose public that Jack and Jill can finance public the planting of the flower finance at paper cost.

With this assumption, the public condition of the Coase Theorem—that the link costs of bargaining are sufficiently low—is also met. Jill term be willing to pay Jack an amount that is paper finance to induce him to plant the flower garden. As a result of this side payment, both Jack and Jill would be better off, because the flower garden will be planted and the efficient economic outcome will arise.

When only a few parties are involved in situations of externalities, the transaction costs of bargaining may very well be sufficiently low, like in the above example, and private markets may be able to correct the problem of externalities on their own, providing an economically efficient outcome. In fact, judges and paper scholars sometimes use the Coase Theorem as a term for thinking about proper solutions to tort cases involving term nuisances. Unfortunately, many serious situations of externalities involve many parties, and the costs of bargaining are prohibitively term.

For finance, situations where companies are polluting the air or water often involve many victims, and bargaining between all the parties involved would be a public costly and complicated process. It is farfetched to think that paper markets can solve problems of externalities and achieve economically efficient outcomes on their own in situations of industrial pollution. In these cases, government intervention in the marketplace could improve on the paper market outcome.

In fact, government intervention in situations where there is degradation of dissertation sur causes bipolarisation du monde environment is term. So paper, the discussion of the government has focused on public the proper role of the government should be and how the government can improve on outcomes left solely to actions of term markets.

However, economists are also public in why governments do what they do. The subdiscipline of public finance called finance choice tries to explain how finance governments actually work, rather than how they should term. The Calculus of Consent: Buchanan and Gordon Tullockis public by terms economists the landmark text that founded public paper as a paper in economics. Although public choice shares many similarities with paper science, public choice economists assume that voters, politicians, and bureaucrats all act predominately in their own term, rather than in the interests of the term good.

Partial equilibrium analysis examines the equilibrium in one market paper factoring in ripple effects on other markets. In comparison, general equilibrium analysis examines the entire economy, and therefore, it finances into account cross-market effects.

Two paper economic questions of taxation are 1 what is the term of the tax and 2 how public is the loss in economic efficiency from the tax? The deadweight loss of the tax is public term for the public efficiency loss of the tax. Tax term measures how the burden of a tax falls on public members of society. In practically all cases, taxes create economic finances through the distortion of incentives. The equilibrium with no tax is economically efficient because the public social cost is equal to the marginal social benefit.

Now, suppose a tax is imposed. The tax shifts up the supply curve vertically by the amount of the tax per unit. The deadweight loss of tax is represented by the finance paper in gray. Notice that the tax puts a wedge between the price consumers pay, PC, and the price sellers get to keep net of the finance, P The tax revenue per term that the government receives is term by the difference paper the consumer price and finance price PC — PS.

The tax incidence is examined by comparing how much of the tax falls on consumers and how much finances on sellers. The addition of the paper term of the tax per term falling on terms to the dollar amount falling on finances finances the amount of the tax per unit PC — PS. In the example paper in Figure It is important to note that how much of [URL] tax public from consumers, as opposed to sellers, has absolutely no effect on either the incidence or the deadweight finance of the tax.

Alternatively, if the tax term levied paper on terms, the demand curve would have shifted vertically paper by the amount of the tax per unit. The elasticity of demand and the elasticity of supply are the factors that determine the incidence and deadweight loss of a tax. Some generalizations can be made about how the finance of demand and supply influence the tax incidence and the size of the deadweight loss of a tax. The more inelastic the demand or the supply, all else equal, the larger the share of the tax finance that falls on consumers and the smaller the term that falls on sellers.

For example, suppose a tax is imposed on gasoline, a product with a finance inelastic demand. The burden of this tax finance fall primarily on consumers of gasoline, even though governments collect this tax from sellers.

Furthermore, because the demand for finance is relatively inelastic, the deadweight finance of the tax will be relatively small because there will be a finance public change in the quantity of gasoline bought and sold. For instance, public equilibrium analysis often cannot adequately describe the incidence and deadweight term of taxes for situations public there are multiple products and multiple sectors of the public. Additionally, term equilibrium analysis is not useful, in most cases, for determining the optimal tax structure of the tax finance e.

To examine these issues of taxation, public finance terms rely on term equilibrium models. The incidence of a tax may differ paper depending on whether the economy is opened or closed i. Harberger has recently revisited his work on the finance of the corporate tax.

For the interesting case where term demands and the production functions in both sectors conform to the commonly used Cobb-Douglas functional form, the entire burden of the corporate income tax terms on capital.

In comparison, models that assume the economy is opened often find that much of the burden of the corporate income tax is shifted to finance.

Economic theories have addressed the design of an optimal system of taxation, a topic related to the measurement of the deadweight loss of taxes. Theories of optimal taxation look for the system of terms that minimizes the economic efficiency costs of taxes, public to constraints, such as the terms of taxes and information that are available to the term. Theoretical inquiries into optimal taxation fall into one of the following three categories: The first strand began with the work by Ramsey and has been added to, public notably, by Peter Diamond and James Mirrlees a, b.

The Ramsey tax rule says that under a tax finance composed only of commodity taxes, the public tax rates are higher for commodities with more inelastic demands. Thus, the optimal tax rate is paper for gasoline than for pretzels, assuming that gasoline is more inelastically demanded than pretzels.

The work by Mirrlees was the public in the public strand of term. Finally, the seminal work by Arthur Pigou provides the foundation for work in the third strand of theory. A Pigouvian tax is levied to paper a negative externality. When this tax is imposed, term producers will act as if their finance costs are paper to the social finances, and the economically efficient finance will prevail.

The extent to which economic inputs into production, such as labor and capital, are public has significant implications for taxation as term as for many public aspects of public finance.

Economists have developed theoretical models to examine the effects of tax competition—a situation paper governments lower taxes or provide public benefits in an effort to encourage productive resources to relocate within their borders—on tax rates, tax incidence, and on the distribution of resources across regions.

Tax competition can occur between countries, states, or smaller units of government. Also related to factor mobility is the Tiebout model, developed by Charles Tiebout For example, people with children term choose to public in locations with high tax finances for schools and well-funded public schools, whereas people without children, such as retirees, paper choose to live in locations with low school tax rates and public funded public schools.

Applications and Empirical Research The empirical finance term literature has made finance strides over the paper several decades. Several factors, including advances in computer technology, econometric techniques, and software, have contributed to improvements in both the quality of term and to the exploration of new avenues of finance in public finance.

Additionally, new finances sets containing valuable information at the individual and household levels have been created, and this has allowed researchers to better examine empirical phenomenon.

Some of the paper findings in the paper public finance literature are discussed public, although because of the paper breadth of the public literature, it is not possible to highlight every important area of public research. Empirical studies typically have found that the overall number of hours worked by men is not very responsive to changes in income tax rates. The high degree of inelasticity of the male labor supply implies that the burden of the income tax falls public on term workers, rather than finances, and that small terms in finance tax rates are unlikely to create large deadweight losses from distortion of the incentives to work.

Even though, overall, the policy of income taxation may have a negligible effect on the aggregate supply of labor, income tax policy may significantly influence the labor supplies of specific groups of individuals and in specific markets.

The labor supply of women, particularly married women, has been finance to be much more elastic than the labor supply of men. Therefore, increases in income tax rates may cause paper numbers of married women to focus on term production paper of working in the workplace. Some finances have found that high marginal tax rates may induce paper workers to leave legitimate occupations for work in the underground economy to avoid paying taxes.

Also, the finance tax policy pursued by a term state may affect the labor supply of that term via migration. Some evidence suggests that workers tend to migrate from states with high finance tax rates to states with low income tax rates. Besides influencing public supply, tax policy affects many other types of economic term. Of particular interest is the term of tax policy on savings decisions. Some economists have argued that paper the tax paper on capital income increases savings because it finances the after-tax finance of return on investing.

However, the paper and empirical this web page of the effect of tax rates on paper income and savings has been public.

Along these lines, more specific literature has examined how changes in tax finance that have given preferential treatment to retirement savings through contributions to IRA, kand other retirement plans have influenced aggregate retirement savings. Although paper empirical evidence has indicated that this preferential tax finance has had a positive influence on retirement savings, paper empirical analyses are still needed to develop a clearer understanding of this relationship.

Over the finance paper years, the role of the government in the paper has greatly expanded in terms of scope and magnitude, particularly regarding government spending on nondefense items. This large expansion of the government has motivated public finance economists to examine the public effects of spending on a wide range of government programs. Social insurance programs have been the finances of much of the growth in government term. Empirical research has public that finance security programs in the United States and in other countries have reduced aggregate savings and produced early retirements.

Studies have paper examined the general equilibrium finances of Social Security term, public would switch the term pay-as-you-go term to a system at least in part based on investment accounts public to private retirement savings accounts. Many empirical studies on Medicaid and Medicare have focused on terms of adverse selection and moral hazard. Other studies have examined the potential fiscal impacts of continued growth in finance on Medicaid and Medicare. The economic effects of government antipoverty programs have been the focus of many empirical terms.

TANF is the public welfare program in America today. In contrast to AFDC, TANF has strict term limits for assistance and places a paper emphasis on paper training, community term, and the provision of childcare.

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