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Daniel Carroll |

Research Economist

Daniel Carroll is a research economist in the Research Department of the Federal Reserve Bank of Cleveland. His primary research interests are macroeconomics, public finance, and political economy. Currently, he is studying the implications of progressive income taxation for the distributions of wealth and income.

Dr. Carroll received a PhD in economics from the University of Virginia. He has a BA from Whitman College in Walla Walla, Washington.

• Fed Publications
• Other Publications

Title	Date	Publication	Author(s)	Type
The Long Run Effects of Changes in Tax Progressivity	December, 2009	Federal Reserve Bank of Cleveland, Working Paper, no. 09-13	Daniel R Carroll; Eric R Young;	Working Papers
	Abstract: This paper compares the steady state outcomes of revenue-neutral changes to the progressivity of the tax schedule. Our economy features heterogeneous households who differ in their preferences and permanent labor productivities, but it does not have idiosyncratic risk. We find that increases in the progressivity of the tax schedule are associated with long-run distributions with greater aggregate income, wealth, and labor input. Average hours generally declines as the tax schedule becomes more progressive implying that the economy substitutes away from less productive workers toward more productive workers. Finally, as progressivity increases, income inequality is reduced and wealth inequality rises. Many of these results are qualitatively different than those found in models with idiosyncratic risk, and therefore suggest closer attention should be paid to modeling the insurance opportunities of households.
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A Note on Sunspots with Heterogeneous Agents	July, 2009	Federal Reserve Bank of Cleveland, Working Paper no. 0906	Daniel R Carroll; Eric R Young;	Working Papers
	Abstract: This paper studies sunspot fluctuations in a model with heterogeneous households. We find that wealth inequality reduces the degree of increasing returns needed to produce indeterminacy, while wage inequality increases it. When the model is calibrated to match the joint distribution of hours, income, and wealth, the required degree of increasing returns to scale is still much too high to be supported empirically (although smaller than similar homogeneous agent economies). We also find that the model robustly predicts only one sunspot, despite having 1,262 predetermined state variables.
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Title	Date	Publication	Author(s)	Type
The Stationary Wealth Distribution under Progressive Taxation	July, 2009	Review of Economic Dynamics, July 2009	Daniel R Carroll; Eric R Young;	Journal Article
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