We extend an analytical general equilibrium model of environmental policy with pre-existing labor tax distortions to include pre-existing monopoly power as well. We show that the existence of monopoly power has two offsetting effects on welfare. First, the environmental policy reduces monopoly profits, and the negative effect on income increases labor supply in a way that partially offsets the ...

We study the implications for optimal monetary policy when declining nominal wages is not a viable margin for adjustment to adverse economic conditions. To this end, we develop a New Keynesian model where downward nominal wage rigidity arises endogenously. We show that the optimal policy response to changing economic conditions is asymmetric. Another important finding is that downward nominal r...

Voters in democracies can learn from the experience of neighbouring states: about policy in a direct democracy (“policy experimentation”), about the quality of their politicians in a representative democracy (“yardstick competition”). Learning between states creates spillovers from policy choice, and also from constitutional choice. I model these spillovers in a simple principalagent framework,...

Becky Blank’s paper is a sweeping, comprehensive, and balanced review and assessment of what social scientists and policy analysts have learned about the effects of the landmark U. S. national welfare reform legislation of 1996. The policy shift embodied in this legislation (and the responses of each of 50 states to it) is the largest policy change affecting the potential welfare population sin...