Macroeconomic Implications of Modeling the Internal Revenue Code in a Heterogeneous-Agent Framework

@article{Moore2020MacroeconomicIO,
  title={Macroeconomic Implications of Modeling the Internal Revenue Code in a Heterogeneous-Agent Framework},
  author={Rachel Moore and Brandon Pecoraro},
  journal={PSN: Income Tax (Topic)},
  year={2020}
}
Fiscal policy analysis in heterogeneous-agent models typically involves the use of smooth tax functions to approximate complex present tax law and proposed reforms. In this paper, we explore the extent to which the tax detail omitted under this conventional approach has macroeconomic implications relevant for policy analysis. To do this, we develop an alternative approach by embedding an internal tax calculator into a large-scale overlapping generations model that, while conditioning on… 

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