Abstract - The distributive effects of carbon taxation are critical for its political acceptability and depend on both income and geographic factors. Using French administrative data, household surveys, and matched employer-employee records, we document that rural households spend 2.8 times more on fossil fuels than urban households and are employed in firms that emit 2.7 times more greenhouse gases. We incorporate these insights into a spatial heterogeneous-agent model with endogenous migration and wealth accumulation, linking spatial and macroeconomic approaches. After an increase in carbon taxes, we quantify that rural households face 20% higher welfare losses than urban households. In an optimal revenue-recycling exercise, we compare transfers targeting income and geography, and show that neglecting for geography reduces welfare gains by 7%. We conclude that carbon policies should account for spatial differences to improve political feasibility.

Abstract - What are the effects of central bank balance sheet expansion, and should we worry about central bank losses? Using a Heterogeneous-Agent New Keynesian model incorporating money in utility and an endogenous zero lower bound (ZLB), we study the fiscal-monetary interactions of central bank balance sheet policies. We find that the overall efficiency of asset purchase programs depends on the combination of the expected future size of the balance sheet and the fiscal transmission of central bank losses. First, permanent balance sheet expansions stimulate the economy in the long run and by anticipation, increase inflation and output during the ZLB episode, as they interact with distortionary taxes and imperfect capital markets. Second, upon exiting the ZLB, the central bank incurs losses; issuing securities to offset these losses is more welfare-enhancing than raising taxes. 

Abstract - Public in-kind provision in education, healthcare, or cultural amenities accounts for a large share of government spending, even though redistribution can be achieved with cash transfers and externalities addressed with subsidies. We propose a new efficiency-based rationale for in-kind provision grounded in two empirically relevant features: (i) these goods are luxuries, with private consumption rising steeply with income, and (ii) they generate pro-equality externalities, such that the social value of additional consumption declines if concentrated among richer households. In a tractable heterogeneous-agent model, we show that when these two conditions hold, direct in-kind provision is strictly welfare-improving, even when cash transfers and subsidies are available. Using household- and country-level data, we document that most publicly provided goods exhibit both features. Embedding these insights into a calibrated model for France, we find that optimal fiscal consolidation should reduce subsidies rather than direct provision, and that targeted in-kind benefits can generate substantial fiscal savings. Finally, we propose a welfare-based imputation method for in-kind benefits, which provides a more accurate assessment of the distributive impact of government spending.