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Title: Essays on Macroeconomics: Structural Analysis of Fiscal Policies and Jobless Recoveries
Citation Type: Dissertation/Thesis
Publication Year: 2014
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Abstract: My research studies how fiscal policies affect an economy and uncovers the cause behind the "Jobless Recovery." The first essay "Consumption Response to Tax Cuts in Life-Cycle Economies" studies the aggregate consumption response to a tax cut in a life-cycle economy. I construct a general equilibrium model where households have a finite lifespan and smooth consumption using one asset. The asset is associated with a stochastic adjustment cost. The model replicates the lifetime mean net worth profile observed in the data. The implied aggregate marginal propensity to consume (MPC) out of the tax cut ranges from 14% to 43%. In contrast to the frictionless version, this model generates a substantial rise in aggregate consumption under the tax cut without needing a large aggregate MPC. The model also indicates the quantitative importance of how a tax cut is financed. The second essay "A Model of the Consumption Response to Government Expenditures" develops a structural model to examine the effect of an increase in government spending. The model has finitely-lived households who smooth consumption using two assets. The first asset is a low return free-to-adjust asset lent by the households to the government; the second asset is a high return costly-to-adjust asset used as capital by a representative firm. Working-age households supply a fixed amount of labor to the firm. The government raises taxes to finance its spending and . . .
Url: https://etd.ohiolink.edu/pg_10?0::NO:10:P10_ACCESSION_NUM:osu1408533926
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Authors: Cui, Zhen
Institution: Ohio State University
Department: Economics
Advisor: Pok-Sang Lam
Degree: PhD
Publisher Location: Columbus, Ohio
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Data Collections: IPUMS CPS
Topics: Labor Force and Occupational Structure
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