Progressive Taxation and the Real Business Cycle

No abstract.

The Role of Consumer's Risk Aversion on Price Rigidity

This paper aims to contribute to the research agenda on the sources of price rigidity. Based on broadly accepted assumptions on the behavior of economic agents, we show that firms’ competition can lead to the adoption of sticky prices as a sub-game perfect equilibrium strategy to optimally deal with consumers’ risk aversion, even if firms have no adjustment costs. To this end, we build a model economy based on consumption centers with several complete markets and relax some traditional assumptions used in standard monetary policy models by assuming that households have imperfect information about the inefficient time-varying cost shocks faced by the .rms. Furthermore, we assume that the timing of events is such that, at every period, consumers have access to the actual prices prevailing in the market only after choosing a particular consumption center. Since such choices under uncertainty may decrease the expected utilities of risk-averse consumers, competitive firms adopt some degree of price stickiness in order to minimize the price uncertainty and "attract more customers".

Liquidity constraints and the behavior of aggregate consumption over the Brazilian Business Cycle

Uma caracteristica marcante no ciclo econômico brasileiro e a alta volatilidade do consumo. O desvio padrão do ciclo do consumo de bens não duráveis, no período entre 1970 e 1998, e igual a 5,26%, quase igual ao do produto (5,57%). Um dos motivos pelos quais os modelos de ciclos reais de negócios não conseguem reproduzir este fato pode ser a existência de restrições ao crédito encontrada pelos consumidores. Este trabalho apresenta uma versão do modelo básico de ciclos reais onde uma fração dos agentes e restrita a consumir toda sua renda a cada período. Simulações numéricas mostram que o modelo com restrição ao crédito e capaz de reproduzir a alta volatilidade da série de consumo, porém o modelo subestima a correlação entre investimento e produto.The Brazilian business cycle presents a key feature consisting ofa high volatility of the consumption series. The standard deviation ofthe non-durable consumption seriesreaches 5.26%, almost as high as the volatility ofthe GNP (5.57%) over the period 1970-1998. The failure ofthe standard real business cycle model to capture thisfact could be related to the high credit restriction most consumer faces in the country. The present study aims to present an extended recursive general equilibrium model to better mimic the above empirical evidence, introducing heterogeneous agentsin the model economy characterized by a set of agents who does not behave according to the permanent income hypothesis due to the credit restriction they face everyperiod. The numerical analysis ofthe proposed model economy reproduces the high volatility present in the Brazilian consumption series. However, the correlation between output and investment series is underestimated due to the presence of those agents who cannot smooth out consumption over the business cycle

Essays in Dynamic Economies

100 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1997.The second essay studies the distributional as well as welfare implication of the inflation tax using a heterogeneous agents growth model that mimics some characteristics of the Brazilian economy. The key findings show that heterogeneity leads to a stronger welfare cost of inflation in terms of aggregate per capita output. Moreover, if the inflation tax is replaced in a revenue neutral way by other alternative distortional income tax regimes, a trade-off between welfare superior and equity improving outcomes becomes apparent.U of I OnlyRestricted to the U of I community idenfinitely during batch ingest of legacy ETD

Essays in Dynamic Economies

100 p.Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1997.The second essay studies the distributional as well as welfare implication of the inflation tax using a heterogeneous agents growth model that mimics some characteristics of the Brazilian economy. The key findings show that heterogeneity leads to a stronger welfare cost of inflation in terms of aggregate per capita output. Moreover, if the inflation tax is replaced in a revenue neutral way by other alternative distortional income tax regimes, a trade-off between welfare superior and equity improving outcomes becomes apparent.U of I OnlyRestricted to the U of I community idenfinitely during batch ingest of legacy ETD

Previdência social e bem estar no Brasil

Este artigo busca avaliar os impactos do Regime Geral de Previdência Social (RGPS) sobre o bem-estar da sociedade. A análise será feita por meio da simulação numérica de um modelo de gerações superpostas, calibrado para reproduzir fatos da economia brasileira, contemplando o fato de que o período de vida dos agentes é incerto e incorporando tanto a hipótese de restrição ao crédito quanto a existência de incerteza sobre a renda dos indivíduos. Dentre as conclusões obtidas destaca-se a de que um sistema de previdência do tipo repartição pode apresentar ganhos de bem-estar em relação a um sistema onde a previdência seja financiada pela poupança dos indivíduos. Porém, este resultado depende do valor atribuído para o fator de desconto intertemporal

The Brazilian Depression in the 1980s and 1990s

Abstract After being one of the fastest growing countries from the end of World War II to the beginning of the 80s, the Brazilian GNP per working-age person dropped 30% below trend during the 80s and 90s. The present study investigates how much of this performance can be explained by the neoclassical growth model. We found that the basic growth model, with exogenous productivity shocks, can account for as much as two-thirds of the actual decline in the Brazilian real GNP per working-age person for the period 1981-1998. The remaining one third could be mostly explained as responses to fiscal policy shocks. The main question that remains to be answer is why the TFP growth rate declined so much, pushing down the growth rate of the Brazilian GNP per working-age person. Journal of Economic Literature Classification Code: E3