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. Reflecting a widespread consensus that public infrastructure investment has become increasingly inefficient, the relative price of public investment has grown at 0.4% per year for the past sixty years. I quantify the negative effect of this trend on aggregate output and growth. If public investment efficiency had remained constant, output would be about 1.5% higher, which translates to more than half of total infrastructure spending. I embed infrastructure innovation in an endogenous growth model and estimate the necessary level of R&D expenditures necessary to offset the growing inefficiency wedge. The model is disciplined by evidence from quasi-experimental variation on the response of infrastructure investment productivity to government R&D expenditures on highways.

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.