The jointly optimal inflation tax, income tax structure, and transfers

The welfare-maximizing income tax structure, rate of money creation, and amounts of intergenerational transfers are jointly determined for given rates of government consumption. When government consumption is zero, it is found for the parameter values examined that the income tax structure is progressive, the rate of money change is negative, and positive transfers are made to the old. As government consumption increases, the tax structure's progressivity declines and turns increasingly regressive, the rate of money change rises, and transfers decrease. It is found that the bulk of the increase in government consumption is optimally financed by a cut in transfers.Expenditures, Public ; Income tax

Gramm-Rudman-Hollings' hold on budget policy: losing its grip?

Budget ; Deficit financing

The right way to price Federal Reserve services

Federal Reserve banks - Service charges

How little we know about budget policy effects

Using a simple model, we show why previous empirical studies of budget policy effects are flawed. Due to an identification problem, those studies’ findings can be shown to be consistent with either policies mattering or not.Budget

A simple way to estimate current-quarter GNP

This paper describes a method developed to predict the advance (first) estimate of inflation-adjusted gross national product (real GNP) using hours-worked data. Besides generating fairly accurate forecasts of advance GNP, the method has two implications. First, the Commerce Department seems to weigh the hours-worked data most heavily in its early estimates of real GNP but less and less so in its revised estimates. Second, analysts attempting to predict current-quarter outcomes in real time need to consider the availability and reliability of data at the time the forecasts are made.Gross national product ; Vector autoregression