In many organizations, agents operate on a fixed budget and allocate funds across sub-periods of the fiscal year. Commonly, unspent budget must be returned to the principal at year-end to prevent policy drifts. However, this savings constraint may induce inefficient spending patterns, such as expenditure surges before the budget expires. This study characterizes optimal budget rollover policy in a model which captures this trade-off. Applying it to Swiss federal consulting spending, I show that substantial welfare gains are possible by allowing agencies to retain one third of unspent funds. Most gains at the optimum stem from a larger share of the budget being returned to the principal, while using the remainder more efficiently to provide a similar amount of public good as under a use-it-or-lose-it rule. The model’s predictions are validated empirically using causal evidence from a staggered reform that liberalized budget rollover rules.

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We leverage a novel spatial IV approach to develop a reduced-form estimator that maps local trade shocks into aggregate outcomes, accounting for inter-regional spillovers. For the China shock in the U.S., we find strong evidence for employment spillovers at the local level, which appear to propagate through input-output linkages rather than labor mobility. They shift the shock’s employment ramifications away from the Pacific and North Atlantic towards the South Atlantic region. For aggregate employment, our model rationalizes the 30% difference between Autor et. al (2013) and the structural follow-up literature but implies that it is insignificant from a statistical standpoint.

Draft available upon request.

This paper constructs the first Distributional National Accounts (DINA) for Switzerland, covering 2003–2022, by linking individual-level income and wealth tax data with national accounts. The Swiss DINA provide a comprehensive measure of income and wealth inequality, capturing all components of national income rather than relying solely on tax statistics. They allow us to assess how economic growth has been distributed, who bears the burden of income, wealth, corporate, and consumption taxes, and how progressive the overall tax system is. The individual-level data enable analysis of the joint distribution of income and wealth, as well as differences by gender and age. Exploiting Switzerland’s fiscal decentralization, we examine the distributional effects of local tax competition and evaluate how the wealth tax—about 12\% of personal tax revenue—shapes overall progressivity. Our approach combines detailed tax records, survey data, and national accounts, with full tax coverage eliminating the need to impute non-filers.

Draft available upon request.