Where redistribution and anti-poverty policies consist of cash transfers allocated according to some pre-specified rules, evaluating their impact on the distribution of living standards and poverty might seem straightforward. It seems sufficient to apply the transfer rules to some representative sample of households. This is the essence of 'incidence analysis' and micro-simulation techniques us...

Note. This original form of this rebuttal was submitted to Science on 3 March 2017 (limited to 300 words as per Science editorial policy) but rejected on 13 March 2017. Herein, we elaborate on our original Science submission in order to more fully address the issue without the length limitations. This rebuttal is followed by the list of the signatories who supported our original submission.

This paper studies optimal monetary and fiscal policies in an economy à la Lucas and Stokey (1983) and Lagos and Wright (2005) with multiple cash and credit goods. We show that optimal policies are in general time inconsistent due to insufficient number of instruments to influence future government decisions. There are two important cases where time consistency can be restored. First, if taxes ...

This paper shows how to use optimal control theory to derive time-consistent optimal government policies in nonlinear dynamic general equilibrium models. It extends the insight of Cohen and Michel (1988), who showed that in linear models time-consistent policies can be found by imposing a linear relationship between predetermined state variables and the costate variables from private agents’ ma...

The following two types of instruments may be used to combat the congestion road and nonroad infrastructure: first, zoning as quantity regulation favored by planners; second, charges tax economists. In contrast instrument choice literature in environmental economics, urban economics planning studies seldom analyze these together. We a general equilibrium spatial model with heterogeneity. examin...

policy-oriented research on the impact on poverty of macroeconomic policies (fiscal, monetary and exchange-rate policies) and adjustment policies (financial liberalization, trade liberalization, and privatisation/de-regulation). In evaluating this impact, the research also identifies complementary policies that can enhance the impact on poverty of macroeconomic and adjustment policies. This pap...

In earlier papers, classes of transfer policies have been studied and maximal and minimal Lorenz curves ( ) L p obtained. In addition, there are policies belonging to the class with given Gini indices or passing through given points in the ( ) p L , plane. In general, a transformation ( ) h x describing a realistic transfer policy has to be continuous. In this paper the results are generalized ...

We study the determinants of voting outcomes on the provision of public consumption through marginal income taxes in the context of the simple linear growth model. We focus on how the dynamic politicoeconomic equilibrium maps the economic fundamentals to policies and long-run growth. We find that in a deterministic growth environment voters internalize, although imperfectly, the deadweight loss...

The econophysics ‘‘two-class’’ theory of Yakovenko and his co-authors shows that the distribution of labor incomes is roughly exponential. This paper extends this result to US subgroups categorized by gender and race. It is well known that Males have higher average incomes than Females, and Whites have higher average incomes than African-Americans. It is also evident that social policies can af...

The legal system is an expensive social institution, raising the question of whether the amount of litigation is socially appropriate. The thesis developed here is that it is not—because of fundamental differences between private and social incentives to use the legal system. These differences permeate litigation, affecting decisions about the bringing of suits, settlement versus trial, and tri...