A number of cross-country comparisons do not find a robust negative relationship between government size and economic growth. In part this may reflect the prediction in economic theory that a negative relationship should exist primarily for rich countries with large public sectors. In this paper an econometric panel study is conducted on a sample of rich countries covering the 1970–95 period. E...

The paper investigates the effects of temporary consumption tax cuts using firm‐level data. As part of its countercyclical measures implemented during the recent global economic crisis, Tur‐ key temporarily lowered consumption taxes on selected durables. Our empirical strategy ex‐ ploits variation in firm exposure to the tax cut which allows us to control for unobserved indus‐ try‐ and ...

We investigate whether late redistribution programs that can be targeted towards low income families, but may distort savings decisions, can “dominate” early redistribution programs that cannot be targeted due to information constraints. We use simple two-period OLG models with heterogeneous agents under six policy regimes: A model calibrated to the U.S. economy (benchmark), two early redistrib...

Using large samples of estate tax returns, we construct new series on wealth concentration in Paris and France from 1807 to 1994. Inequality increased until 1914 because industrial and financial estates grew dramatically. Then, adverse shocks, rather than a Kuznets-type process, led to a massive decline in inequality. The very high wealth concentration prior to 1914 benefited retired individual...

How Does Imperfect Competition in the Labor Market Affect Unemployment Policies? We consider a continuum of workers ranked according to their abilities to acquire education and two firms with different technologies that imperfectly compete in wages to attract these workers. Once employed, each worker bears an education cost proportional to his/her initial ability, this cost being higher in the ...

The rate of cost pass-through exceeds 50% under strategic delegation of decision-making to managers with sales revenue contracts— regardless of the number of …rms in the industry and demand curvature. This contrasts sharply with pro…t-maximization, for which cost pass-through can take on any positive value. The key intuition is that …rms under delegation act as if they faced more rivals than th...

In this paper, we estimate a mixed logit model for demand in the U.S. processed cheese market. The estimates are used to determine pass-through rates of cost changes under different behavioral regimes. We find that, under collusion, the pass-through rates for all brands fall between 21% and 31% while, under Bertrand-Nash price competition, the range of pass-through rates are between 73% and 103...

This paper presents new findings from the World Top Incomes Database and discusses some of their policy implications. In particular, the paper provides updated top income series for the United States—including new estimates through 2010, showing a strong rebound of the top 1 percent income share, following the 2008–09 sharp fall. It also presents updated income series for other developed countr...

Social Spending Generosity and Income Inequality: A Dynamic Panel Approach This paper explores if more generous social spending polices in fact lead to less income inequality, or if redistributive outcomes are offset by behavioral disincentive effects. To account for the inherent endogeneity of social policies with regard to inequality levels, I apply the System GMM estimator and use the presum...