Abstract: We study the relationship between the term structure of inflation expectations and investment. Using a panel of Italian firms from 2014-2023 and a randomized information exposure design, we show that the inflation expectations semi-elasticity of investment is 0.6 and the corresponding estimate for intangible investment is 0.12. Both are statistically significant and 25\% larger for inflation expectations at the five-year horizon than the one-year horizon. We interpret these findings through the lens of a classic Mundell-Tobin channel. Since tangibles can be largely externally financed with nominal  debt, higher inflation expectations cause firms to perceive tangible investment as cheaper, while internally financed intangibles only rise through complementarity with tangibles. Our heterogeneity results broken down by expectation horizon, liquidity, and leverage allow us to rule out competing channels as the primary driver for the resulting increase in investment.

Abstract. Endogenous depreciation via capital maintenance is a simple but practically important channel for the transmission of capital tax policy. In practice, tax authorities tax the return on capital net of maintenance. With endogenous maintenance allocations, this implies that capital is relatively inelastic to tax policy because depreciation moves inversely with tax changes. The strength of this channel is mediated by the maintenance elasticity of depreciation, which naturally varies by capital type. Using a simple neoclassical model, I show that abstracting from the maintenance channel is normatively non-trivial. Although an unconstrained planner would still set the tax on capital to zero in a neoclassical model with homothetic preferences, the quantitative gain is roughly 30% as large as the benchmark Lucas (1990) case. In a practically relevant case, I examine optimal differential taxation when the Ramsey planner is constrained to raise revenue from capital. I prove that the planner would prefer to tax capital more when it has a higher maintenance elasticity of depreciation and a higher return net of maintenance compared to other capital types. That implies the current system---which taxes structures at thrice the rate on equipment---would be pushed toward uniform taxation.

Abstract. Modern Money Theory (MMT) has risen to prominence in popular policy debates within macroeconomics. MMT economists argue for creating a job guarantee program, which they argue would generate price stability. Using a benchmark model of time consistency supplemented with a job guarantee, we conclude that once policymakers’ incentives are considered, the job guarantee does nothing to help stabilize prices. We compare this program to a competing proposal to maintain price stability and full employment, NGDP targeting.