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- W4205655668 abstract "<ns3:p>We study the non-linear propagation mechanism of tax policy in a heterogeneous agent equilibrium business cycle model with search frictions in the labor market and an extensive margin of employment adjustment. The model exhibits endogenous job destruction and endogenous hiring standards in the form of occasionally-binding zero-surplus constraints. After parameterizing the model using U.S. data, we find that the dynamic response of employment to a temporary change in the labor income tax is highly non-linear, displaying sizable asymmetries and state-dependence. Notably, the response to a tax rate cut is at least twice as large in a recession as in an expansion.</ns3:p>" @default.
- W4205655668 created "2022-01-25" @default.
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- W4205655668 date "2021-12-20" @default.
- W4205655668 modified "2023-10-18" @default.
- W4205655668 title "Non-Linear Employment Effects of Tax Policy" @default.
- W4205655668 doi "https://doi.org/10.17016/ifdp.2021.1333" @default.
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