# Step 272: wage regimes under the central specification, and the rewritten text

**Why.** Step 267 ran the four wage regimes under the step-266 closure. In that closure, a government
with a surplus hoarded it. Under the central rule of steps 268 and 271, surpluses are returned to
households, so revenue kept in taxed profits reaches the displaced again. This step re-runs the regimes
under the central specification. It also rewrites the thesis text and the site so that every number
comes from that one specification.

Generated by `scripts/wage_regimes_central_v272.py`; archived in
`data/processed/wage_regimes_central_v272.json`. Illustrative; not a forecast.

## Results (144 distinct cases per regime, central specification)

| Regime | Price level at end | Preserved | Renters / outright owners |
|---|---:|---:|---:|
| Gain stays in profits | 1.00 | 85 (59%) | 15 / 15 of 24 |
| Gain to wages (stable prices) | 1.00 | 71 (49%) | 12 / 12 of 24 |
| Half to wages, half to prices | 0.90 | 71 (49%) | 12 / 12 of 24 |
| Gain to prices (deflation) | 0.80 | 50 (35%) | 7 / 12 of 24 |

Year 10, compared with the profits regime. Points of base-year output, mean over 144 pairs; the parts
add up.

| | Gain to wages | Half | Gain to prices |
|---|---:|---:|---:|
| Room for benefits | −1.21 | −1.22 | −1.20 |
| of which: revenue | −0.93 | −0.66 | −0.31 |
| of which: real interest on existing debt | −0.28 | −0.56 | −0.89 |

**What changes from step 267.**

- **There is a fiscal channel, and it is modest.** When the gain goes to wages instead of taxed
  profits, revenue falls by almost a point of output and preservation falls from 85 to 71 cases.
- **The channel depends on the government rule.** Under a government that hoards surpluses (step 267),
  extra revenue never reaches households, and the wages and profits regimes preserve the same number
  of cases.
- **Deflation adds harm through housing, not the budget.** The room falls by the same 1.2 points as
  under the wages regime, now through real interest on nominal debt. Preservation still falls from 71
  to 50, and all 21 extra cases are renters and mortgage holders; outright owners do not change.
- **Renters' extra loss is all deflation.** At stable prices, renters and outright owners are preserved
  equally.

## Text and site

The results chapter, abstract, introduction and discussion, methods chapter, literature review,
English working paper and the site headlines are rewritten to the central specification. Two kinds
of change:

- **Changed claims.** The fiscal rule matters (31%–56%). Rationing, not the claw-back, is the largest
  part of the relative gap. Pass-through hurts through deflation more than through the budget. The
  Israeli result depends on the opening balance, not on the consumption share. The weighted European
  estimate does not survive country exposure trends.
- **New references, each verified.** Berg, Buffie and Zanna (2018); Benzell et al. (2015); Guner,
  Kaygusuz and Ventura (2023); Mian, Straub and Sufi (2021); Costinot and Werning (2023); Thuemmel
  (2023); Acemoglu, Manera and Restrepo (2020); Korinek and Suh (2024); Hubbard, Skinner and Zeldes
  (1995); Debowy et al. (2024).