Browsing LIF-SAFE Working Papers by Research Area "Macro Finance"
Now showing items 1-20 of 67
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A Decentralization Theorem of Taxation
(2015-05-01)"In the EU there are longstanding and ongoing pressures towards a tax that is levied on the EU level to substitute for national contributions. We discuss conditions under which such a transition can make sense, starting ... -
A Life-Cycle Model with Ambiguous Survival Beliefs
(2015-10-02)Based on a cognitive notion of neo-additive capacities reflecting likelihood insensitivity with respect to survival chances, we construct a Choquet Bayesian learning model over the life-cycle that generates a motivational ... -
Aggregate and Distributional Effects of Increasing Taxes on Top Income Earners
(2015-07-13)We analyze the macroeconomic implications of increasing the top marginal income tax rate using a dynamic general equilibrium framework with heterogeneous agents and a fiscal structure resembling the actual U.S. tax system. ... -
Aging and Pension Reform: Extending the Retirement Age and Human Capital Formation
(2014-12-29)Projected demographic changes in industrialized and developing countries vary in extent and timing but will reduce the share of the population in working age everywhere. Conventional wisdom suggests that this will increase ... -
An Experiment on Retail Payments Systems
(2014-05-05)We study the behavioral underpinnings of adopting cash versus electronic payments in retail transactions. A novel theoretical and experimental framework is developed to primarily assess the impact of sellers’ service fees ... -
Are Tax Havens Good? Implications of the Crackdown on Secrecy
(2015-07-01)The pressure on tax haven countries to engage in tax information exchange shows first effects on capital markets. Empirical research suggests that investors do react to information exchange and partially withdraw from ... -
Asset Pricing in OLG Economies With Borrowing Constraints and Idiosyncratic Income Risk
(2018-09-17)This paper analyzes how the combination of borrowing constraints and idiosyncratic risk affects the equity premium in an overlapping generations economy. I find that introducing a zero-borrowing constraint in an economy ... -
Asymmetric Social Norms
(2017-01-10)Studies of cooperation in infinitely repeated matching games focus on homogeneous economies, where full cooperation is efficient and any defection is collectively sanctioned. Here we study heterogeneous economies where ... -
Austerity
(2014-11-19)We shed light on the function, properties and optimal size of austerity using the standard sovereign model augmented to include incomplete information about credit risk. Austerity is defined as the shortfall of consumption ... -
Bank and Sovereign Debt Risk Connection
(2013-01-01)Euro area data show a positive connection between sovereign and bank risk, which increases with banks’ and sovereign long run fragility. We build a macro model with banks subject to moral hazard and liquidity risk (sudden ... -
Bank Networks: Contagion, Systemic Risk and Prudential Policy
(2015-07-01)We present a network model of the interbank market in which optimizing risk averse banks lend to each other and invest in non-liquid assets. Market clearing takes place through a tâtonnement process which yields the ... -
Can Firms see into the Future? Survey evidence from Germany
(2017-11-03)This paper presents new evidence on the expectation formation process of firms from a survey of the German manufacturing sector. It focuses on the expectation about their future business conditions, which enters the widely ... -
Can Households See into the Future? Survey Evidence from the Netherlands
(2018-07-14)This paper presents new evidence on the expectation formation process from a Dutch household survey. Households become too optimistic about their future income after their income has improved, consistent with the ... -
Central Bank-Driven Mispricing
(2018-10-01)We show that bond purchases undertaken in the context of quantitative easing efforts by the European Central Bank created a large mispricing between the market for German and Italian government bonds and their respective ... -
Cognition, Optimism and the Formation of Age-Dependent Survival Beliefs
(2018-06-02)This paper investigates the roles psychological biases play in deviations between subjective survival beliefs (SSBs) and objective survival probabilities (OSPs). We model deviations between SSBs and OSPs through age-dependent ... -
Control Thyself: Self-Control Failure and Household Wealth
(2014-10-09)We examine the relationship between household wealth and self-control. Although self-control has been linked to consumption and financial behavior, its measurement remains an open issue. We employ a definition of self-control ... -
Credit Cycles: Experimental Evidence
(2016-06-23)This paper reports that credit cycles emerged in laboratory economies that were not hit by aggregate shocks and in which information about fundamentals was perfect. This main result is in our view puzzling because standard ... -
Cross-Border Resolution of Global Banks
(2015-03-01)Most recent regulations establish that resolution of global banking groups shall be done according to bail-in procedures and following a Single Point of Entry (SPE) as opposed to a Multiple Point of Entry (MPE) approach. ... -
Does Austerity Pay Off?
(2015-02-01)We ask whether cuts of government consumption lower or raise the sovereign default premium. To address this question, we set up a new data set for 38 emerging and advanced economies which contains quarterly time-series ... -
Does Exchange of Information between Tax Authorities Influence Multinationals’ Use of Tax Havens?
(2015-02-23)Since the mid-1990s, countries offering tax systems that facilitate international tax avoidance and evasion have been facing growing political pressure to comply with the internationally agreed standards of exchange of tax ...