In Progress:

Dynamic Inconsistency of Social Choice: More Debt, Less Disciplinewith Todd Lensman 

Shows that social choices are often dynamically inconsistent with heterogeneous conditional preferences: successive governments find increasing debt levels optimal, while choosing not to impose fiscal discipline on future governments
 
Non-Robustness of Proportional Fiscal Policieswith Todd Lensman 

Extreme uncertainty may lead to the optimality of macroeconomic policies that distribute welfare proportionally, but even those cases cannot generally be implemented or approximated well with proportional income or consumption taxation
 
Wealth and Income Inequality Dynamics and Optimal Policieswith Yu She 
 
Quantifies counterfactual consequences of optimal dynamic taxation for inequality, within a computational model matching evolution of wealth and income distributions in the U.S. over five decades





Working Papers:

Implications of Uncertainty for Optimal Policies, with Todd Lensman, working paper 
 
Shows that uncertainty manifests as endogenous lack of commitment by the government, and implies optimality of simplified, periodically-reformed public policies; competitive financial markets are generally not efficient, implying a meaningful role for government provision of insurance 

Complexity vs Progressivitywith Jaden Y. Chenworking paper  
  
Derives bounds on complexity of optimal income taxes when taxpayers lack precise knowledge of the tax schedule they face: if this knowledge is sufficiently imprecise, optimal taxes have to be progressive

under revision for Journal of European Economic Association   |   Online Appendix: pdf 
  
Characterizes optimal social insurance and redistribution with endogenous retirement: rewarding later retirement is optimal, both when efficient retirement age increases and decreases with productivity; optimal pensions generate significant welfare gains as well as aggregate output gains 

Optimal Dynamic Taxes
, with M.Golosov and A.Tsyvinski
NBER Working Paper No.17642  
 
Shows a tight connection between the recursive form of dynamic optimal taxation problems and a static Mirrlees model with two goods; derives the conditions under which optimal labor distortions tend to zero for high enough incomes





Publications:
 
Redistribution and Social Insurancewith M.Golosov, A.Tsyvinski
American Economic Review, 106(2): 359-386   |   Online Appendix: pdf 

Derives closed-form expressions for limiting behavior of optimal dynamic labor distortions in a life cycle with private idiosyncratic shocks; typical labor distortions are U-shaped, savings distortions increase in current earnings when calibrated using estimates from U.S. administrative data 
 
Optimal Pension Systems with Simple Instruments*with M.GolosovA.ShouridehA.Tsyvinski
American Economic Review103(3) P&P: 502-507 

Quantifies welfare gains from pensions optimized within the set of status quo instruments; retirement responses are at least as important as idiosyncratic persistent shocks 

Journal of Public Economics, 97(1): 160-175

Quantitatively examines the case for capital taxation, based on the logic that goods preferred by those with high ability ought to be taxed: in all cases considered, the welfare gains are small 

Journal of Money, Credit, and Banking, 43(5): 147-174 

Argues that merging micro and macro approaches to optimal taxation provides new insights into efficient redistribution and social insurance 

Doomsday Comes? Non-Recursive Analysis of the Recursive Towers-of-Hanoi Problem
Focus, 95(2): 10-14 

Proposes a non-recursive solution to a classic example of an intrinsically recursive problem; shows that, as a result, the algorithm complexity is reduced from exponential to polynomial





Selected Discussions:

Pension Design in the Presence of Systemic Risk 
by Abdoulaye Ndiaye and Stavros Panageas

by Felix Bierbrauer, Axel Ockenfels, Andreas Pollak, Désirée Rückert

by Fatih Guvenen, Gueorgui Kambourov, Burhan Kuruscu, and Daphne Chen

by Yena Park

by Roc Armenter and Thomas M. Mertens





Research marked with * is supported by the Institute for the Social Sciences grants.