The emergence of ‘stagflation’ in the 1970’s challenged the view firms would lower prices given slack demand. Since then, expectations have played a central role in monetary economics. While this paper emphasizes expectations as a key driver of inflation, it also argues market power and cost-push factors have a prominent role. Evidence suggests the leading firm in an industry typically accounts for a large share of sales and has substantial pricing power. This paper links the market position of firms within an industry to aggregate price dynamics, using a general equilibrium framework. It attributes increases in the cost pass-through following aggregate shocks to strategic complementarity between firms. The model also provides a basis to evaluate the dynamic welfare costs of market distortions.

In the United States, the capital share of income grew over the 1990s and 2000s and the expansion of pass-through businesses played a large role. Household survey data show business income was a primary component behind the rise in income inequality. The same data indicate households at the top of the income distribution also have a high marginal propensity to save. A model accounting for heterogeneity in saving behavior across households demonstrates the capital income shock can have a relatively large effect on the equilibrium interest rate due to the combined effect on capital demand and supply.

This paper estimates the share of FDI subject to additional tax following the implementation of BEPS Pillar Two, accounting for the presence of low-tax affiliates in high-tax countries. It first considers the scope of the new rules, where both the characteristics of the overall MNE group and its affiliates matter. There are two main findings: (i) large MNEs account for most foreign investment and (ii) low-tax affiliates often hold a disproportionate share of the FDI stock, even in countries where average or statutory tax rates are high.

This paper assesses the macroeconomic and welfare effects of a tax reform in an emerging economy. We develop a dynamic general equilibrium model matching the structural characteristics of Morocco.

The process of structural transformation is stagnant in many developing economies. This wedge between observed and optimal labor allocations suggests the presence of institutional and market frictions, which impose costs on the reallocation of labor from low to high productivity sectors. Using a panel of crosscountry sector-level data, we estimate a dynamic panel error correction model that captures the dynamic adjustment of labor flows across sectors.

In 2014 there were more than 14 million refugees worldwide and almost a million places for permanent resettlement were needed. This article reviews administrative and survey data on the characteristics and integration outcomes of refugees resettled in the United States, Canada and Scandinavia.