This paper is my ongoing research on welfare analysis using real business cycle approach. In this paper, I have modeled heterogeneous households with different income potential and paying different tax rates. The model incorporates progressive tax rates and computes its effects on the welfare of...

This paper considers the economic implications of having unit roots in stochastic processes of variables like consumption or GDP. Using a variety of models, we develop indirect tests for unit roots based on sharp distinctions that should arise when the scale variable is either difference...

Czech Republic, Hungary and Poland will have to join the European and Monetary Union. Surprisingly, there is very little work on the welfare consequences of the loss of monetary policy flexibility for these countries. This paper fills this void by providing a framework to evaluate quantitatively...