Optimal Taxes Without Commitment.

In the problem of optimal taxation in an economy with two productive factors, labor and capital, the optimal solution when the government can commit to a sequence of tax rates, has the tax on capital tending to zero in the limit, with all the tax burden on labour. It is well known, however, that this solution is time inconsistent; so if the commitment power is not perfect, this second best tax plan will not be suitable. We model explicitly the tradeoff between the cost of revising the tax plan, and the benefit of the revision.FISCAL POLICY;CAPITAL;TAXES;TAXATION

Avoiding Liquidity Traps

Once the zero bound on nominal interest rates is taken into account, Taylor-type interest-rate feedback rules give rise to unintended self-fulfilling decelerating inflation paths and aggregate fluctuations driven by arbitrary revisions in expectations. These undesirable equilibria exhibit the essential features of liquidity traps, as monetary policy is ineffective in bringing about the government's goals regarding the stability of output and prices. This paper proposes several fiscal and monetary policies that preserve the appealing features of Taylor rules, such as local uniqueness of equilibrium near the inflation target, and at the same time rule out the deflationary expectations that can lead an economy into a liquidity trap.TAYLOR RULES; LIQUIDITY TRAPS; ZERO BOUND ON NOMINAL INTEREST RATES.

Monetary Policy and Multiple Equilibria

In this paper, we characterize conditions under which interest rate feedback rules wherby the nominal interest rate is set as an increasing function of the inflation rate generate multiple equilibria. We show that these conditions depend not only on the fiscal regime (as emphasized in the fiscal theory of the price level) but also on the way in which money is assumed to enter preferences and technology. We analyze this issue in flexible and sticky price environments.MONETARY POLICY ; PRICES ; INTEREST RATE

Three energy scales in the superconducting state of hole-doped cuprates detected by electronic Raman scattering

We explored by electronic Raman scattering the superconducting state of Bi-2212 single crystal by performing a fine tuned doping study. We found three distinct energy scales in A1g, B1g and B2g symmetries which show three distinct doping dependencies. Above p=0.22 the three energies merge, below p=0.12, the A1g scale is no more detectable while the B1g and B2g scales become constant in energy. In between, the A1g and B1g scales increase monotonically with under-doping while the B2g one exhibits a maximum at p=0.16. The three superconducting energy scales appear to be an universal feature of hole-doped cuprates. We propose that the non trivial doping dependence of the three scales originates from Fermi surface topology changes and reveals competing orders inside the superconducting dome.Comment: 6 pages, 5 figure

A Note on the Political Economy in Immigration

immigration ; economic models

The effects of market structure on industry growth: rivalrous nonexcludable capital

Author's draft issued as working paper dated September 2005. Final version available online at http://www.sciencedirect.com/We analyze imperfect competition in dynamic environments where firms use rivalrous but nonexcludable industry-specific capital that is provided exogenously. Capital depreciation depends on utilization, so firms influence the evolution of the capital equipment through more or less intensive supply in the final-goods market. Strategic incentives stem from, (i) a dynamic externality, arising due to the non-excludability of the capital stock, leading firms to compete for its use (rivalry), and, (ii) a market externality, leading to the classic Cournot-type supply competition. Comparing alternative market structures, we isolate the effect of these externalities on strategies and industry growth