Institution
Federal Reserve System
Other•Washington D.C., District of Columbia, United States•
About: Federal Reserve System is a other organization based out in Washington D.C., District of Columbia, United States. It is known for research contribution in the topics: Monetary policy & Inflation. The organization has 2373 authors who have published 10301 publications receiving 511979 citations.
Topics: Monetary policy, Inflation, Interest rate, Market liquidity, Debt
Papers published on a yearly basis
Papers
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TL;DR: The authors estimate an aggregate matching function and find that the regression residual, which captures movements in matching efficiency, displays procyclical fluctuations and a dramatic decline in the matching efficiency with respect to matching efficiency.
Abstract: We estimate an aggregate matching function and find that the regression residual, which captures movements in matching efficiency, displays procyclical fluctuations and a dramatic decline ...
130 citations
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TL;DR: In this article, the authors explore the effects of progressive taxes in conventional growth models with heterogenous households and show that when variations in tax codes stem from differences in progressivity, shares of tax revenue in GDP or income may constitute poor proxies for average marginal tax rates.
Abstract: Since the emergence of early endogenous growth models (Larry E. Jones and Rodolfo E. Manuelli, 1990; Sergio Rebelo, 1991), a large body of work has studied the growth effects of tax reform. While virtually all of this literature has confined itself to the analysis of flat-rate taxes, tax codes are generally progressive. This paper, therefore, explores the effects of progressive taxes in conventional growth models with heterogenous households. In such frameworks, the tax code helps to determine simultaneously the pre-tax income distribution and the rate of technical progress. We present three main findings. First, we show that when variations in tax codes stem from differences in progressivity, shares of tax revenue in GDP or income may constitute poor proxies for average marginal tax rates. In particular, we find that the decrease in progressivity associated with the Tax Reform Act of 1986 (TRA-86) lowered the U.S. average marginal tax rate by 0.06 to 0.37 percentage points depending on the model used. At the same time, however, the endogenous adjustment in the distribution of income produced by this progressivity change contributed to raising the tax share of income by approximately 0.8 percentage points. Because marginal tax rates are not easily observable, empirical work often has to make use of tax shares in income as an alternative. To the degree that lower marginal rates entail less tax distortion, our study suggests that relying on tax shares may cause less progressive tax codes to be incorrectly perceived as more distortional. Second, we find that the progressivity decrease implied by TRA-86 helped raise U.S. per capita GDP growth by 0.12 to 0.34 percentage points. Given the prominence of TRA-86 compared with other U.S. tax reforms over the past four decades, these growth effects, while not negligible (as in Robert E. Lucas, 1990), shed doubt on the potential for tax policy to alter significantly prospects for U.S. long-run growth. Finally, consistent with previous work, our analysis suggests that the progressivity change associated with TRA-86 had a significant effect on income inequality, resulting in a 20to 24percent increase in the Gini coefficient of income. We carry out our analysis using two prototypical endogenous growth models augmented to include a nondegenerate distribution of income. These models, one first formulated by Robert J. Barro (1990) and the other by Rebelo (1991), account for two polar extremes regarding the use of tax proceeds. On the one hand, in Rebelo’s two-sector framework, tax revenue is spent in a way that affects neither the marginal utility of private consumption nor the production possibilities of the private sector. On the other hand, in the environment envisioned by Barro (1990), all tax revenue serves to finance public services that enhance private production. Interestingly, the results we have just described emerge irrespective of the framework under consideration.
130 citations
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TL;DR: In this article, the authors propose an accounting framework that allows them to assess empirically the magnitude of the loss in aggregate resources due to such misallocation, which requires only information on the dispersion in borrowing costs across firms, which they measure directly from the interest rate spreads on their outstanding publicly-traded debt.
130 citations
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TL;DR: In the United States, wealth is highly concentrated and very unequally distributed: the richest 1% hold one third of the total wealth in the economy as mentioned in this paper. But understanding the determinants of wealth inequality is a challenge for many economic models.
Abstract: In the United States wealth is highly concentrated and very unequally distributed: the richest 1% hold one third of the total wealth in the economy. Understanding the determinants of wealth inequality is a challenge for many economic models. We summarize some key facts about the wealth distribution and what economic models have been able to explain so far.
130 citations
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TL;DR: In this paper, the authors use an empirical approach and an extensive dataset developed by the Fiscal Affairs Department of the IMF to find no particular debt threshold above which medium-term growth prospects are dramatically compromised.
Abstract: Using a novel empirical approach and an extensive dataset developed by the Fiscal Affairs Department of the IMF, we find no evidence of any particular debt threshold above which medium-term growth prospects are dramatically compromised. Furthermore, we find the debt trajectory can be as important as the debt level in understanding future growth prospects, since countries with high but declining debt appear to grow equally as fast as countries with lower debt. Notwithstanding this, we find some evidence that higher debt is associated with a higher degree of output volatility.
130 citations
Authors
Showing all 2412 results
Name | H-index | Papers | Citations |
---|---|---|---|
Ross Levine | 122 | 398 | 108067 |
Francis X. Diebold | 110 | 368 | 74723 |
Kenneth Rogoff | 107 | 390 | 75971 |
Allen N. Berger | 106 | 382 | 65596 |
Frederic S. Mishkin | 100 | 372 | 34898 |
Thomas J. Sargent | 96 | 370 | 39224 |
Ben S. Bernanke | 96 | 446 | 76378 |
Stijn Claessens | 96 | 462 | 42743 |
Andrew K. Rose | 88 | 374 | 42605 |
Martin Eichenbaum | 87 | 234 | 37611 |
Lawrence J. Christiano | 85 | 253 | 37734 |
Jie Yang | 78 | 532 | 20004 |
James P. Smith | 78 | 372 | 23013 |
Glenn D. Rudebusch | 73 | 226 | 22035 |
Edward C. Prescott | 72 | 235 | 55508 |