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

How little we know about deficit policy effects

We use a simple model to 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 policies either mattering or not. We argue that this problem is difficult and not likely to be resolved soon.Budget deficits ; Fiscal policy