Lea Fricke
Lea Fricke
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I am a PhD student in Economics at the University of St. Gallen in Switzerland. I hold a Master degree in Quantitative Economics from LMU Munich.
My main research interests are in the field of public economics and optimal policy design.
You can find my CV here.
Email: lea.fricke@student.unisg.ch
Twitter: lea_charlottee
Working Papers
Working Papers
Carbon Emissions and Redistribution: The Design of Carbon Tax Rebates
joint with Clemens Fuest and Dominik Sachs
We study optimal redistribution and carbon taxation in a Mirrlees framework. Households differ in their carbon footprint due to both (i) the overall level of spending and (ii) the composition of spending. Introducing a cap on carbon emissions reduces the social value of output, which lowers the efficiency costs of taxation and thereby strengthens the scope for redistribution. However, the optimal increase in redistribution is weaker than suggested by popular proposals for a carbon dividend. While the optimal rebate schedule over compensates low-income households and under compensates high-income households for their carbon tax burden, the rebate nevertheless rises with income. Quantifying the model for Germany, we find that the optimal rebate for the 90th income percentile is nearly three times that for the 10th percentile, whereas carbon tax payments are about seven times higher. This results in higher effective average tax rates at the top and lower ones at the bottom of the income distribution.
The Early Saver Catches the Low Rate: Mortgage Spreads and Life-Cycle Savings
joint with Peter Kress
This paper analyzes how mortgage pricing affects young households’ consumption, saving, and housing decisions. Compiling a novel dataset of mortgage offers in Germany, we document that mortgage interest rates increase with loan-to-value (LTV) ratio, with spreads up to 100 basis points. Through the lense of an incomplete-markets life-cycle model with an endogenous mortgage rate schedule, we can reconcile why young households build up substantial amounts of liquid wealth prior to homeownership despite the absence of a downpayment requirement. Calibrated to German micro data, the model is able to match empirical patterns of liquid wealth accumulation, leverage at home purchase, and the age profile of the transition into homeownership.
Publications
Publications
Recycling CO2 Tax Revenue and the Carbon Dividend: A Guide to the Literature
joint with Clemens Fuest and Dominik Sachs
Hacienda Pública Española / Review of Public Economics, 254-(2/2025), 45-57
This paper discusses the seemingly contradicting implications of the carbon dividend concept and the double dividend idea for the use of revenue from carbon pricing. We provide an introduction to a number of key contributions to this debate in the literature and explain how their findings and results can be reconciled. Some existing studies on the effects of revenue recycling through the carbon tax may be too optimistic regarding the impact because they neglect the interaction between the carbon dividend, labour supply, and the rest of the tax system.
joint with Mehmet Ayaz, Clemens Fuest and Dominik Sachs
European Economic Review, 153, 2023, Article 104381
The COVID-19 pandemic has led to an increase in public debt in most countries, and the Ukraine war is likely to have similar effects. This will increase fiscal pressure in the future. We study how the shape of the optimal nonlinear income tax schedule is affectedby this increase. We calibrate the workhorse optimal income tax model to five European countries: France, Germany, Italy, Spain and the UK. Applying an inverse-optimum approach to the pre COVID-19 economies we obtain the Pareto weights implicitly applied by the different countries. We then ask how the schedule of marginal and average taxrates should be optimally adjusted to the increase in fiscal pressure. For all countries, we find that the increase in fiscal pressure leads to a less progressive optimal tax scheduleboth in terms of marginal and average tax rates.
Work in Progress
Work in Progress
Taxing Me, Taxing You: Efficiency Costs of Income Taxation with Coworker Spillover Effects
joint with Ulrich Glogowsky, David Gstrein and Dominik Sachs
Efficiency Costs of Income Taxation: Income Effects and the Role of the Distribution
joint with Dominik Sachs
A Framework for the Analysis of Income-Driven Repayment Programs
joint with Sebastian Findeisen and Dominik Sachs
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