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on Public Economics |
| By: | Creedy, John; Gemmell, Norman |
| Abstract: | This paper examines the extent to which projected aggregate tax revenue changes, association with population ageing over the next 50 years, can be expected to finance expected increases in social welfare expenditures. Projections from two separate models, dealing with social expenditures and income tax and GST revenue, are used. The results suggest that the modest projected required increase in the overall average tax rate over the next 50 years can be achieved automatically by adjusting income tax thresholds using an index of prices rather than wages. Based on evidence about the New Zealand tax system over the last 50 years, comparisons of average and marginal tax rates suggest that such an increase may be feasible and affordable. The paper discusses the range of considerations involved in deciding if this automatic increase in the aggregate average tax rate, via real fiscal drag of personal income taxes, is desirable compared with alternative fiscal policy changes. |
| Keywords: | Taxation, Aging population, Public spending, Fiscal policy, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwcpf:2820&r=pbe |
| By: | Takeo Hori (College of Economics, Aoyama Gakuin University); Noritaka Maebayashi (Graduate School of Economics, Osaka University) |
| Abstract: | We reexamine indeterminacy and utility-generating public spending under balanced- budget rules in a simple one-sector growth model. The introduction of consumption tax (subsidy) as well as subsidies for savings and labor modify indeterminacy con- ditions in the existing studies. We show that if consumption subsidies and income taxes exist, indeterminacy occurs even when private and public consumption are Edgeworth substitutes and public spending and leisure are separable in the utility function. Indeterminacy also occurs even when they are weak Edgeworth comple- ments if consumption tax and subsidies for savings and labor are present. Surpris- ingly, when they are strong Edgeworth complements, the stronger external effects of public consumption tend to lower the possibility of equilibrium indeterminacy in the presence of consumption tax. |
| Keywords: | utility-generating public spending, indeterminacy, balanced-budget rule |
| JEL: | E32 E62 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1313&r=pbe |
| By: | Baskaran, Thushyanthan; Lopes da Fonseca, Mariana |
| Abstract: | We survey the theoretical and empirical literature on local and international tax competition in Economics. Based on this survey, we discuss whether EU countries should harmonize tax policies to prevent a race to the bottom. Much of the evidence suggests that tax competition does not lead to significant reductions in tax revenues. Therefore, we conclude that tax coordination is in all likelihood unnecessary to prevent inefficiently low levels of taxation in the EU. But since the evidence against adverse effects of tax competition is not unambiguous, we also discuss whether intergovernmental transfers might be a less invasive means than outright tax harmonization to prevent a race to the bottom. -- |
| Keywords: | Tax competition,Tax coordination,European Union,Fiscal federalism |
| JEL: | F59 H26 H77 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:163&r=pbe |
| By: | Sugata Ghosh; Kyriakos C. Neanidis |
| Abstract: | In this paper, we study the effects of bureaucratic corruption on fiscal policy and the subsequent impact on economic growth. Here corruption takes three forms: (i) it reduces the tax revenue raised from households, (ii) it inflates the volume of government spending, and (iii) it reduces the productivity of ‘effective’ government expenditure. The analysis distinguishes between the case where fiscal choices are determined exogenously to ensure a balanced budget and the case where the government optimally sets its policy instruments. Our policy experiments reveal that for both cases, corruption affects fiscal policy and growth in similar ways, in particular, through higher income tax and inflation rates, and a lower level of government spending. The findings from our unified framework could rationalise the diverse empirical evidence on the impact of corruption on economic growth in the literature. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:edb:cedidp:13-05&r=pbe |
| By: | Timm Bönke; Beate Jochimsen; Carsten Schröder |
| Abstract: | In many federations, fiscal equalization schemes soften fiscal imbalances across the member states. Such schemes usually imply that the member states internalize only a small fraction of the additional tax revenue from an expansion of the state-specific tax bases, while the remainder of the additional tax revenue is redistributed horizontally or vertically. We address the question as to which extent state-level jurisdictions in such a federation underexploit their tax bases. By means of a stylized model we show that the state authorities in such a federation have incentives to align the effective tax rates of their residents to the internalized fraction of marginal tax revenue. We empirically test the model using three setups: one state level exercise and two micro level exercises using administrative income-tax data in form of an OLS regression and a natural-experiments design. All setups support the results from our theoretical model. |
| Keywords: | Fiscal federalism, taxation, tax-back rate, fiscal externalities |
| JEL: | C21 H21 H77 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1307&r=pbe |
| By: | Baskaran, Thushyanthan |
| Abstract: | Anecdotal evidence from pre-modern Europe and North America suggests that rulers are forced to become more democratic once they impose a significant fiscal burden on their citizens. One difficulty in testing this taxation causes democratization hypothesis empirically is the endogeneity of public revenues. I use introductions of value added taxes and autonomous revenue authorities as sources of quasi-exogenous variation to identify the causal effect of the fiscal burden borne by citizens on democracy. The instrumental variables regressions with a panel of 122 countries over the period 1981-2008 suggest that revenues had on average a mild positive effect on democracy. -- |
| Keywords: | taxation,democracy,democratic transition,tax innovations |
| JEL: | H20 P14 O23 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:164&r=pbe |
| By: | Dirk Krueger (Department of Economics, University of Pennsylvania); Alexander Ludwig (University of Cologne, Faculty of Management, Economics and Social Sciences) |
| Abstract: | In this paper we characterize quantitatively the optimal mix of progressive income taxes and education subsidies in a model with endogeneous human capital formation, borrowing constraints, income risk and incomplete financial markets. Progressive labor income taxes provide social insurance against idiosyncratic income risk and redistributes after tax income among ex-ante heterogenous households. In addition to the standard distortions of labor supply progressive taxes also impede the incentives to acquire higher education, generation a non-trivial trade-off for the benevolent utilitarian government. The latter distortion can potentially be mitigated by an education subsidy. We find that the welfare-maximizing fiscal policy is indeed characterized by a substantially progressive labor income tax code and a positive subsidy for college education. Both the degree of tax progressivity and the education subsidy are larger than in the current U.S. status quo. |
| Keywords: | Progressive Taxation, Capital Taxation, Optimal Taxation |
| JEL: | E62 H21 H24 |
| Date: | 2013–03–27 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:13-035&r=pbe |
| By: | Fuest, Clemens; Peichl, Andreas; Siegloch, Sebastian |
| Abstract: | Because of endogeneity problems very few studies have been able to identify the incidence of corporate taxes on wages. We circumvent these problems by using an 11-year panel of data on 11,441 German municipalities' tax rates, 8 percent of which change each year, linked to administrative matched employer-employee data. Consistent with our theoretical model, we find a negative effect of corporate taxation on wages: a 1 euro increase in tax liabilities yields a 77 cent decrease in the wage bill. The direct wage effect, arising in a collective bargaining context, dominates, while the conventional indirect wage effect through reduced investment is empirically small due to regional labor mobility. High and medium-skilled workers, who arguably extract higher rents in collective agreements, bear a larger share of the corporate tax burden. -- |
| Keywords: | business tax,wage incidence,administrative data,local taxation |
| JEL: | H2 H7 J3 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13039&r=pbe |
| By: | Ball, Christopher; Creedy, John |
| Abstract: | This paper investigates the implications of population ageing and changes in labour force participation rates for projections of revenue obtained from personal income taxation and a consumption tax (in the form of a broad-based goods and services tax). A projection model is presented, involving changing age-income profiles over time for males and females. The model is estimated and applied to New Zealand over the period 2011-2062. |
| Keywords: | Aging population, Taxation, New Zealand, |
| Date: | 2013–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwcpf:2827&r=pbe |
| By: | Hansjörg Blöchliger |
| Abstract: | This paper provides an overview of fiscal consolidation efforts at the central and sub-central government level, both during the current and past consolidation episodes. After experiencing a deficit and debt hike during the crisis, sub-central debt is mostly stabilising. So far, sub-central consolidation has been mainly achieved through spending cuts, while overall revenues remained largely stable. Sub-central tax revenues rose a bit, but intergovernmental transfers went down slightly. Sub-central governments in a few countries need to consolidate further, if they want to reach debt levels of 2007 or 2011 by the year 2026, as shown by fiscal gap calculations. During past consolidation episodes, sub-central consolidation increased the probability of debt stabilisation at the general government level. Reductions in intergovernmental grants improved the success rate. Central and sub-central deficits tended to move in parallel, although some subcentral governments experienced a “second trough” three or four years after consolidation had started. The paper suggests a number of instruments that could help sub-central governments consolidate their budgets, and argues in favour of amendments to sub-central fiscal rules.<P>Assainissement budgétaire aux différents niveaux d'administration - Partie 1. Quelles politiques pour quel degré d'assainissement ?<BR>Le présent rapport offre une vue d’ensemble des efforts d’assainissement budgétaire déployés par les administrations centrales et infranationales, aussi bien dans le cadre de l’actuelle phase d’assainissement qu’au cours des phases antérieures. Après une augmentation de leur déficit et de leur dette pendant la crise, les administrations infranationales voient leur dette se stabiliser d’une manière générale. À ce jour, elles sont essentiellement parvenues à assainir leurs finances en réduisant les dépenses, tandis que les recettes globales sont restées stables dans une large mesure. Si les recettes fiscales des administrations infranationales ont progressé de façon modérée, les transferts interadministrations ont enregistré une légère baisse. Dans quelques pays, les administrations infranationales doivent assainir davantage leurs finances si elles veulent atteindre les niveaux d’endettement de 2007 ou 2011 d’ici 2026, comme le montrent les chiffres de l’écart sur l’ajustement budgétaire. Les précédentes phases d’assainissement des finances publiques au niveau infranational ont accru la probabilité de stabilisation de la dette au niveau de l’État. Les réductions des dons interadministrations se sont traduites par une amélioration du taux de réussite. Les déficits publics aux niveaux central et infranational ont généralement évolué en parallèle, bien que certaines administrations infranationales aient enregistré une « rechute » trois à quatre ans après le début de la phase d’assainissement. Un certain nombre d’instruments susceptibles d’aider les administrations infranationales à assainir leurs finances sont proposés dans le rapport, où il est également préconisé d’apporter des modifications à leurs règles budgétaires. |
| Keywords: | fiscal federalism, sub-national fiscal policy, fiscal consolidation at sub-national level, sub-national debt, fédéralisme budgétaire, politique budgétaire au niveau infranational, assainissement des finances publiques au niveau infranational, dette des administrations infranationales |
| JEL: | E65 H60 H77 |
| Date: | 2013–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1070-en&r=pbe |
| By: | Boris Cournède; Antoine Goujard; Álvaro Pina; Alain de Serres |
| Abstract: | Despite sustained efforts made in recent years to rein in budget deficits, a majority of OECD countries still face substantial public finance consolidation needs moving forward, owing to the legacy of debt accumulation before the crisis, and to the role played by fiscal policy in rescuing the banking system and supporting aggregate demand in the aftermath of the recession. Further budget consolidation is also needed over a much longer horizon to face long-term public spending pressures, in particular from pensions and health care. <P>Fiscal consolidation complicates the task of achieving other policy goals. In most cases, it weighs on demand in the short term. And, if too little attention is paid to the mix of instruments used to achieve consolidation, it can slow the process of global rebalancing, undermine long-term growth and exacerbate income inequality. It is therefore important for governments to adopt consolidation strategies that minimise these adverse side-effects. The analysis assesses the near and long-term consolidation needs for OECD countries and proposes consolidation strategies that take into account other policy goals as well as country-specific circumstances and preferences. To do so, increases in particular taxes and cuts in specific spending areas are assessed for their effects on short- and longterm growth, income distribution and external accounts. The results of detailed simulations indicate that a significant number of OECD countries may have to raise harmful taxes or cut valuable spending areas to deliver sufficient consolidation, underscoring the need for structural reforms to counteract these side-effects.<P>Choisir des instruments d'assainissement budgétaire favorables à la croissance et à l'équité<BR>Choisir des instruments d’assainissement budgétaire favorables à la croissance et à l’équité Malgré les efforts soutenus entrepris ces dernières années pour endiguer les déficits budgétaires, les besoins d’assainissement des finances publiques demeurent importants dans la plupart des pays de l’OCDE, du fait des dettes accumulées avant la crise et du rôle joué par la politique budgétaire dans le sauvetage du système bancaire et dans le soutien de la demande globale au lendemain de la récession. Des efforts supplémentaires d’assainissement budgétaire sont également nécessaires à long terme pour faire face à l’augmentation des dépenses publiques, en particulier de retraite et de santé. <P>L’assainissement budgétaire complique la réalisation d’autres objectifs des politiques publiques. Dans la plupart des cas, il pèse sur la demande à court terme. De plus, si le choix des instruments à mettre en oeuvre ne fait pas l’objet d’assez d’attention, ceux-ci risquent de ralentir la correction des déséquilibres mondiaux, de réduire la croissance à long terme et d’augmenter les inégalités de revenu. Les stratégies d’assainissement budgétaire adoptées par les gouvernements doivent donc réduire autant que possible ces effets négatifs. L’analyse présente une estimation des besoins d’assainissement à court et à long terme des pays de l’OCDE et propose des stratégies d’ajustement budgétaire qui tiennent compte des autres objectifs des politiques publiques ainsi que de la situation et des préférences propres à chaque pays. Le choix de ces stratégies repose sur une évaluation des effets de différentes augmentations de recettes et diminutions de dépenses sur la croissance à court et à long terme, la répartition des revenus et les comptes courants. Les résultats de simulations détaillées indiquent que de nombreux pays de l’OCDE pourraient avoir à augmenter des taxes préjudiciables ou à réduire des dépenses utiles afin de parvenir au degré d’assainissement budgétaire voulu, soulignant l’intérêt des réformes structurelles pour contrebalancer ces effets négatifs. |
| Keywords: | growth, fiscal consolidation, structural reforms, income distribution, global imbalances, equity, croissance, réforme structurelle, équité, assainissement budgétaire, déséquilibres mondiaux, répartition des revenus |
| JEL: | H62 H63 H68 |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaab:7-en&r=pbe |
| By: | Dina Pomeranz |
| Abstract: | Tax evasion generates billions of dollars of losses in government revenue and creates large distortions, especially in developing countries. Claims that the VAT facilitates tax enforcement by generating paper trails on transactions between firms have contributed to widespread VAT adoption worldwide, but there is little empirical evidence about this mechanism. This paper analyzes the role of third party information for VAT enforcement through two randomized experiments among over 400,000 Chilean firms. Announcing additional monitoring has less impact on transactions that are subject to a paper trail, indicating the paper trail's preventive deterrence effect. Tax enforcement leads to strong spillovers up the VAT chain, increasing compliance by firms' suppliers. These findings confirm that when evasion is taken into account, significant differences emerge between otherwise equivalent forms of taxation. |
| JEL: | H25 H26 O17 O23 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19199&r=pbe |
| By: | Ball, Christopher; Creedy, John |
| Abstract: | This paper considers the extent to which the standard argument, that the disproportionate excess burden of taxation suggests the use of tax-smoothing in the face of future cost increases, is modified by uncertainty regarding the future. The role of uncertainty and risk aversion are examined using several highly simplified models involving a possible future contingency requiring an increase in tax-financed expenditure. |
| Keywords: | Tax smoothing, Uncertainty, Risk, Excess burden, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:vuw:vuwcpf:2839&r=pbe |
| By: | Hansjörg Blöchliger; Balázs Égert |
| Abstract: | This paper provides empirical analysis that measures the cyclical properties of intergovernmental transfers (or grants). Modelling a fiscal policy reaction function this paper tests whether the transfers systems in OECD countries are pro- or counter-cyclical, i.e. whether they offset cyclical fluctuations of sub-central economies or, on the contrary, exacerbate them. Regression results suggest that transfer systems tend to be pro-cyclical in general and in more than half of OECD countries they tend to destabilise sub-central budgets. Transfer pro-cyclicality may be the result of several factors: Transfer spending is often determined as a share of central government tax revenue, which itself tends to fluctuate with the cycle. Moreover, many grants are matching sub-central spending and hence tend to exacerbate fluctuations of that sub-central spending. Pro-cyclical grants could partly explain the often observed pro-cyclicality of subcentral government fiscal policy.<P>Assainissement budgétaire aux différents niveaux d'administration - Partie 3. Les dons interadministrations ont-ils un effet pro ou anticyclique ?<BR>Ce document présente une analyse empirique qui évalue les propriétés cycliques des transferts (ou dons) interadministrations. En modélisant une fonction de réaction de la politique budgétaire, ce document détermine si les systèmes de transfert dans les pays de l’OCDE sont pro ou anticycliques, c’est-à-dire s’ils compensent les variations cycliques des économies infranationales ou, au contraire, les amplifient. Les résultats des régressions suggèrent que les systèmes de transferts sont procycliques en général et dans plus de la moitié des pays de l’OCDE, et ont tendance à déstabiliser les budgets des administrations infranationales. La procyclicité des transferts peut être la conséquence de plusieurs facteurs : les dépenses de transfert représentent souvent un pourcentage des recettes fiscales de l’administration centrale, qui elles-mêmes fluctuent en fonction du cycle. En outre, de nombreux dons sont proportionnels aux dépenses infranationales et ont donc tendance à amplifier les fluctuations de ces dépenses infranationales. Le caractère procyclique des dons pourrait expliquer en partie la procyclicité souvent observée de la politique budgétaire des administrations infranationales. |
| Keywords: | fiscal federalism, intergovernmental grants, stabilisation, pro-cyclicality, fédéralisme budgétaire, stabilisation, dons et transferts interadministrations, procyclicité |
| JEL: | H42 H50 H77 |
| Date: | 2013–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1072-en&r=pbe |
| By: | Andrea Colciago |
| Abstract: | This paper provides optimal labor and dividend income taxation in a general equilibrium model with oligopolistic competition and endogenous firms' entry. In the long run the optimal dividend income tax corrects for inefficient entry. The dividend income tax depends on the form of competition and nature of the sunk entry costs. In particular, it is higher in market structures characterized by competition in quantities with respect to those characterized by price competition. Oligopolistic competition leads to an endogenous countercyclical price markup. As a result offsetting the distortions over the business cycle requires deviations from full tax smoothing. |
| Keywords: | Firms' Entry; Market Stuctures; Market Distortions; Optimal Dividend Income Tax |
| JEL: | E62 L13 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:383&r=pbe |
| By: | Nizar Allouch (, Queen Mary, University of London, School of Economics and Finance, UK) |
| Abstract: | This paper investigates the private provision of public goods in segregated societies. While most research agrees that segregation undermines public provision, the findings are mixed for private provision: social interactions, being strong within groups and limited across groups, may either increase or impede voluntary contributions. Moreover, although efficiency concerns generally provide a rationale for government intervention, surprisingly, little light is shed in the literature on the potential effectiveness of such intervention in a segregated society. This paper first develops an index based on social interactions, which, roughly speaking, measures the welfare impact of income redistribution in an arbitrary society. It then shows that the proposed index vanishes when applied to large segregated societies, which suggests an “asymptotic neutrality” of redistributive policies. |
| Keywords: | Public Goods, Segregated Society, Private Provision, Networks, Bonacich Transfer Index |
| JEL: | C72 D31 H41 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.52&r=pbe |
| By: | Manasan, Rosario G. |
| Abstract: | This study presents an evaluation of the National Expenditure Program for 2013. First, this paper projects that the fiscal targets set out in the Budget of Expenditures and Sources of Financing (BESF) for 2013 are likely to be met. Specifically, fiscal deficit is projected to be PHP 9.6 billion lower than the BESF at PHP 231 billion, while government revenue is estimated to be equal to PHP 1.8 trillion in 2013 which is also higher than the BESF projection. This is despite the expectation that the BOC collections and nontax revenues will be just equal to the 2011 and 2012 levels. Additional revenues is thus sourced from the BIR collections, which is estimated to reach PHP 1.26 trillion in 2013, exceeding the President`s Budget`s estimate of PHP 1.24 trillion. Second, although a more balanced distribution of the budget between the social services and economic services sectors is emphasized in the 2013 National Expenditure Program, the services sector still accounts for more than half of the increase in expenditure program in 2013. Finally, the improving debt profile of the country will continue in 2013. National government borrowing will continue to be biased in favor of domestic borrowings. |
| Keywords: | fiscal deficit, tax effort, fiscal sustainability, expenditure program, Philippines, budget share, revenue program, financing program |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2013-31&r=pbe |
| By: | Kaja Fredriksen |
| Abstract: | Fiscal rules that constrain sub-central government (SCG) budgeting are very common across the OECD, but there are substantial cross-country differences in their implementation and impact. This paper presents the 2011 update of the fiscal rules database established in 2005. As in 2005, budget balance objectives are the most common form of rule along with borrowing constraints, while limits on SCG expenditure are rare. Because of trade-offs between objectives that fiscal rules must cater to, cross-country variation in the value of the composite indicator is low. There is, however, much more variation in country scores for the individual objectives of fiscal rules. Despite the increased focus on sustainability in public finances over recent years, indicator values have changed little since 2005 except for a few countries. This suggests that the sub-central fiscal rules framework was in place well before the recent crisis struck.<P>Assainissement budgétaire aux différents niveaux d'administration - Partie 2. Les règles budgétaires s'appliquant aux collectivités territoriales : mise à jour de l'indicateur institutionnel<BR>Les règles budgétaires encadrant l’établissement des budgets des administrations infranationales sont très courantes dans la zone de l’OCDE, mais leur mise en oeuvre et leur impact diffèrent grandement selon les pays. Le présent rapport expose la mise à jour 2012 de la base de données sur les règles budgétaires établie en 2005. En 2005, les règles les plus couramment utilisées sont les obligations d’équilibre budgétaire et la limitation des emprunts, tandis que la limitation des dépenses des collectivités locales est rare. En raison d’arbitrages entre les différents objectifs des règles budgétaires, la valeur de l’indicateur composite varie peu d’un pays à l’autre. Les écarts sont toutefois beaucoup plus marqués dans les notes nationales attribuées aux différents objectifs des règles budgétaires. Malgré l’importance accrue accordée, ces dernières années, à la viabilité des finances publiques, les valeurs de l’indicateur ne varient guère depuis 2005, excepté pour un petit nombre de pays. Cela donne à penser que le cadre de règles budgétaires applicable aux collectivités territoriales était en place bien avant la récente crise. |
| Keywords: | budget systems, fiscal federalism, fiscal rules, système budgétaire, règles budgétaires, fédéralisme budgétaire |
| JEL: | H11 H61 H74 H77 |
| Date: | 2013–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1071-en&r=pbe |
| By: | Castellacci, Fulvio; Lie, Christine |
| Abstract: | This paper presents a survey of the micro-econometric literature on the effects of R&D tax credits on firms’ innovation activities. We focus on one specific aspect that has not received sufficient attention in previous research: the sectoral dimension. Our meta-regression analysis (MRA) sets up a new database collecting a large number of firm-level studies on the effects of R&D tax credits and investigates the factors that may explain differences in the estimated effects that are reported in the literature. The main result of the MRA analysis is indeed that sectors matter. Micro-econometric studies that have focused on a sub-sample of high-tech industries have on average obtained a smaller estimated effect of R&D tax credits. The paper proposes a simple framework to investigate why the effects of R&D tax credits vary across sectors and points out new directions and hypotheses for future research. |
| Keywords: | R&D tax credits; R&D policy; sectors; meta-regression analysis |
| JEL: | H25 H32 O32 O38 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:47937&r=pbe |
| By: | Rafal Kierzenkowski |
| Abstract: | Restoring fiscal sustainability is a major challenge in Slovenia. Yet, the performance in terms of expenditure control is poor and public expenditure on social spending increased briskly during the crisis, significantly more than on average across the OECD. Despite recent progress in reforming the pension system, Slovenia continues to face major age-related spending pressures. Reforming the welfare state would help achieve fiscal consolidation, increase the quality of fiscal adjustment and address long-term fiscal sustainability challenges. This could be done without significantly worsening income inequality, which is low in Slovenia. Despite recent progress, cash transfers do not seem to be sufficiently means tested. Partly driven by generous social transfers, average effective tax rates on returning to work from inactivity and unemployment are high and could be further cut gradually. Efficiency frontier analysis suggests there is scope to improve spending efficiency without undermining the quality of in kind services on secondary education, health care and public administration. There is excess capacity in pre-school and compulsory education and the allocation of tertiary education services is regressive. The delivery of health care could be improved by rationalising inpatient care and enhancing costeffective primary care, which would generate savings in the medium term. Further increasing the effective retirement age and reforming the financing of health and long-term care are the main policy priorities to contain the pressure of population ageing on expenditure. This Working Paper relates to the 2013 OECD Economic Review of Slovenia (http://www.oecd.org/eco/surveys/slovenia-2013.htm).<P>Restructurer les dépenses sociales en Slovénie<BR>Restaurer la soutenabilité des finances publiques est un enjeu majeur en Slovénie. Cependant, la maîtrise des dépenses est faible et les dépenses sociales publiques ont fortement augmenté durant la crise – nettement plus qu’en moyenne dans la zone OCDE. En dépit de récentes avancées de la réforme du système de retraite, la Slovénie reste confrontée à de fortes pressions sur les dépenses liées au vieillissement de la population. Une réforme de l’État-providence contribuerait à l’assainissement budgétaire, améliorerait la qualité de l’ajustement budgétaire et relèverait les défis de soutenabilité des finances publiques à long terme. Cette réforme pourrait être menée sans détériorer significativement les inégalités de revenus, qui sont faibles en Slovénie. En dépit de progrès récents, les transferts monétaires ne semblent pas suffisamment soumis à des conditions de ressources. Alimentés en partie par de généreux transferts sociaux, les taux moyens effectifs d’imposition des inactifs et des chômeurs qui retrouvent un emploi sont élevés et pourraient être graduellement réduits. L’analyse des frontières d’efficience laisse entrevoir une marge d’amélioration de l’efficience des dépenses sans obérer pour autant la qualité des prestations en nature dans les domaines de l’enseignement secondaire, des soins de santé et de l’administration publique. Il existe des surcapacités dans l’enseignement préscolaire et obligatoire, et l’allocation des services de l’enseignement supérieur est régressive. La fourniture de soins de santé pourrait progresser en qualité grâce à une rationalisation des soins dispensés dans le cadre d’une hospitalisation et une meilleure efficacité-coût des soins primaires, ce qui engendrerait des économies à moyen terme. Un nouveau recul de l’âge effectif de la retraite et la réforme du financement des soins de santé et de la prise en charge de la dépendance sont les principales priorités de l’action publique afin de contenir la pression qu’exerce le vieillissement de la population sur les dépenses. Ce Document de travail se rapporte à l’Étude économique de l’OCDE de la Slovénie 2013 (http://www.oecd.org/fr/eco/etudes/slove nie-2013.htm) |
| Keywords: | health, education, long-term care, pension system, fiscal consolidation, Slovenia, sustainability, cash transfers, welfare spending, in-kind benefits, santé, Slovénie, dépenses sociales, assainissement budgétaire, système des retraites, soutenabilité, transferts monétaires, prestations en nature, soins de long terme |
| JEL: | H62 I18 I28 I38 J14 J26 J65 |
| Date: | 2013–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1061-en&r=pbe |
| By: | Llanto, Gilberto M.; Zen, Fauziah |
| Abstract: | This paper discusses governmental fiscal support for financing long-term infrastructure projects in ASEAN countries. More specifically, it discusses the role of guarantees and subsidies in promoting public-private partnership (PPP) projects. It draws on case studies of Philippine and Indonesian PPPs, and information from secondary sources to highlight the critical role of such fiscal support in making feasible the financing of long-term infrastructure projects that may be economically beneficial but commercially or financially unviable without such support. The paper points out the need for a strong fiscal position and analyzes the implications of guarantees and subsidies on fiscal management. An important insight is the need to secure budgets for long-term infrastructure projects, which may be done through a medium-term expenditure framework. Based on the analysis of Philippine and Indonesian case studies, it provides specific recommendations to improve the implementation of PPP projects. |
| Keywords: | infrastructure, subsidy, government guarantee, Philippines, public-private partnership (PPP), concessions, fiscal space, contingent liabilities, affermage, turnkey contracts, medium-term expenditure framework |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:phd:dpaper:dp_2013-08&r=pbe |
| By: | Luciano Mauro (Università di Trieste, Italy, Dipartimento di Scienze Economiche Aziendali, Statistiche e Matematiche); Francesco Pigliaru (Università di Cagliari and CRENoS, Italy Dipartimento di Scienze Economiche e Aziendali) |
| Abstract: | By studying the interaction between social capital and decentralization, we show that political decentralization can be a source of divergence across heterogeneous regions. In particular, we claim that since the local endowments of social capital display their effect on the economy mainly through the functioning of local institutions, decentralization enhances (hampers) growth wherever social capital is high (low). We define our hypothesis within a growth model with public capital, and use the North-South divide in Italy to assess the quantitative plausibility of our model. A calibration exercise shows that it accounts for the major swings in the Italian regional divide since 1861. |
| Keywords: | Social Capital, Convergence, Economic Growth |
| JEL: | O4 N9 R5 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.57&r=pbe |
| By: | Asatryan, Zareh; Baskaran, Thushyanthan; Grigoriadis, Theocharis; Heinemann, Friedrich |
| Abstract: | This paper exploits the introduction of the right of referenda at the local level in the German state of Bavaria in 1995 to study the fiscal effects of direct democracy. In the first part of the paper, we establish the relationship between referenda activity and fiscal performance by using a new dataset containing information on all 2500 voter initiatives between 1995 to 2011. This selection on observables approach, however, suffers from obvious endogeneity problems in this application. The main part of the paper exploits population dependent discontinuities in the signature and quorum requirements of referenda to implement a regression discontinuity design (RDD). To safeguard against co-treatments that might affect fiscal outcomes simultaneously at the same thresholds, we validate our results by extending the RDD approach to a difference-in-discontinuity (DiD) design. By studying direct legislation in an archetypical cooperative federation as Germany, our paper extends the literature to a novel institutional setting. The results indicate that in our setting - and in contrast to most of the evidence from Switzerland and the US - direct democracy causes an expansion of local government budgets. -- |
| Keywords: | direct democracy,fiscal policy,regression discontinuity,Bavaria |
| JEL: | D72 D78 H70 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:13038&r=pbe |
| By: | Pietro Battiston; Simona Gamba |
| Abstract: | We study the effect of social pressure on tax compliance, focusing on the compliance of shop sellers to the legal obligation of releasing tax receipts for each sale. We carry out a field experiment on bakeries in Italy, where a strong gap exists between the legal obligation and the actual behavior of sellers. Social pressure is manipulated by means of an explicit request for a receipt when not released. We find that a single request for a receipt causes a 17 per cent rise in the probability of a receipt being released for a sale occurring shortly thereafter. This provides evidence of a social scal multiplier: on average, a single request for a receipt causes 2.38 additional receipts being released overall. |
| Keywords: | Tax evasion, field experiments, social norms, social pressure |
| JEL: | H32 K34 E62 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:249&r=pbe |
| By: | Arjan Ruijs (PBL Netherlands Environmental Assessment Agency); Herman Vollebergh (PBL Netherlands Environmental Assessment Agency, CentER and Tilburg Sustainability Centre, Tilburg University) |
| Abstract: | Since 1997 the Netherlands has a tax allowance scheme introduced to promote investments in energy saving technologies and sustainable energy production. This Energy Investment Tax Allowance (EIA in Dutch) reduces up-front investment costs for firms investing in the newest energy saving and sustainable energy technologies. The basic design of the EIA has remained the same over the past 15 years. Firms investing in technologies listed in the annually updated ‘Energy List’ may deduct some of the investment costs from their taxable profits. The EIA may also reduce search costs by investors to find particular technologies because of the Energy List which is used to consider eligibility for the subsidy. This Energy List contains generic technologies that meet a certain energy-saving standard or a selection of novel, but proven, technologies with a higher energy-saving potential than conventional technologies. Over the past 15 years, the use of the EIA has been affected by a number of changes, mainly due to exogenous factors, such as interactions with other policy instruments, rising oil and gas prices, and the economic crisis since 2007. Despite this turbulence and changes in government focus, the EIA is still part of the Dutch energy policy mix. Our evaluation of the EIA contains four lessons. First, the use of tax revenues to subsidise investment in energy-efficient technologies and renewable energy is not very different from using on-budget subsidies if budgetary rules require sufficient accountability of such tax expenditures. At the beginning of the scheme, a lack of accountability of tax expenditures contributed to budgetary turbulence. A number of budget overruns in later periods were not related to budget accountability issues, but to changes outside the EIA. Second, incentive compatibility problems of the EIA are of concern but seem to be manageable. The main weakness of the tax allowance is the difficulty to prevent free-riders from receiving subsidies, even though subsidy effectiveness has improved considerably over the years. Third, the use of a dynamic technology list makes the regulation flexible, allowing policy to refocus and apply tighter standards if necessary. The list also reduces the information asymmetry between supply and demand of new technologies and helps suppliers of energy-saving or sustainable energy technologies to overcome the well-known ‘valley of death’. Finally, the design of a subsidy scheme should pay sufficient attention to the likely interaction with other policy instruments, in particular other subsidy schemes aimed at complementary objectives. The turbulence with the EIA over the 2001–2007 period was mainly caused by fluctuations in the application of other instruments. |
| Keywords: | Energy Efficiency, Renewable Energy, Investment, Tax, Tax Preference, Policy Evaluation |
| JEL: | H23 H25 H32 O33 Q48 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2013.56&r=pbe |
| By: | Ondra Kamenik; Zdenek Tuma; David Vavra; Zuzana Smidova |
| Abstract: | This paper develops a simple model-based framework for stress testing fiscal consolidation strategies under different scenarios of future shocks. A baseline scenario assuming a gradual debt consolidation is presented and by assuming different future developments (e.g. lower potential growth) and/or model specification in terms of a fiscal rule confidence bands around the baseline are obtained. Trade-offs between costs and benefits are evaluated, in terms of cumulative output loss and primary surpluses, as well as political difficulty of fiscal strategies and risk of failed consolidation. The model is applied to Austria, Czech Republic and Germany. This working paper relates to the 2013 OECD Economic Surveys of Austria, Czech Republic and Germany. (www.oecd.org/eco/surveys)<P>Un modèle de simulation simple de crise budgétaire - études de cas des économies autrichienne, allemande et tchèque<BR>Ce document de travail présente un modèle simple permettant de tester des stratégies de consolidation budgétaire face à différents scénarios de chocs futurs. Le scénario de référence suppose une consolidation progressive de la dette et présente différentes évolutions futures (exemple : potentiel de croissance inférieur) et /ou une spécification du modèle sous la forme de bandes de confiance des règles budgétaires autour du scénario de référence. Ce document évalue les compromis entre les coûts et les avantages en termes de perte cumulative de production et d’excédents primaires ainsi que la difficulté d’application des stratégies budgétaires d’un point de vue politique et le risque d’échec de la consolidation budgétaire. Le modèle est appliqué à l’Autriche, la République tchèque et l’Allemagne. Ce document de travail a trait aux Etudes Economiques de l’OCDE de l’Autriche, de la République tchèque et de l’Allemagne, 2013.(www.oecd.org/eco/etudes) |
| Keywords: | fiscal policy, Central Europe, structural deficit, debt consolidation, politique budgétaire, déficit structurel, consolidation de la dette, Europe centrale |
| JEL: | E62 E63 E65 |
| Date: | 2013–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1074-en&r=pbe |
| By: | Jesus Crespo Cuaresma; Samir K.C.; Petra Sauer |
| Abstract: | We construct a new dataset of inequality in educational attainment by age and sex at the global level. The comparison of education inequality measures across age groups allows us to assess the effect of inter-generational education attainment trends on economic growth. Our results indicate that countries which are able to reduce the inequality of educational attainment of young cohorts over time tend to have higher growth rates of income per capita. This effect is additional to that implied by the accumulation of human capital and implies that policies aiming at providing broad-based access to schooling have returns in terms of economic growth that go beyond those achieved by increasing average educational attainment. |
| Keywords: | human capital, education inequality, age structure, economic growth |
| JEL: | I24 I25 O50 |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2013:m:6:d:0:i:6&r=pbe |
| By: | Celbis, Mehmet Güney (UNU-MERIT / MGSoG, Maastricht University); Nijkamp, Peter (Vrije Universiteit Amsterdam); Poot, Jacques (University of Waikato) |
| Abstract: | Low levels of infrastructure quality and quantity can create trade impediments through increased transport costs. Since the late 1990s an increasing number of trade studies have taken infrastructure into account. The purpose of the present paper is to quantify the importance of infrastructure for trade by means of meta-analysis and meta-regression techniques that synthesize various studies. The type of infrastructure that we focus on is mainly public infrastructure in transportation and communication. We examine the impact of infrastructure on trade by means of estimates obtained from 36 primary studies that yielded 542 infrastructure elasticities of trade. We explicitly take into account that infrastructure can be measured in various ways and that its impact depends on the location of the infrastructure. We estimate several meta-regression models that control for observed heterogeneity in terms of variation across different methodologies, infrastructure types, geographical areas and their economic features, model specifications, and publication characteristics. Additionally, random effects account for between-study unspecified heterogeneity, while publication bias is explicitly addressed by means of the Hedges model. After controlling for all these issues we find that a 1 per cent increase in own infrastructure increases exports by about 0.6 per cent and imports by about 0.3 per cent. Such elasticities are generally larger for developing countries, land infrastructure, IV or panel data estimation, and macro-level analyses. They also depend on the inclusion or exclusion of various common covariates in trade regressions |
| Keywords: | Infrastructure, Trade, Transportation, Communication, Public Capital, Public Goods, Meta-Analysis |
| JEL: | O18 F10 H54 R53 C10 F19 R49 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2013032&r=pbe |
| By: | Eller, Markus (BOFIT); Fidrmuc, Jarko (BOFIT); Fungácová , Zuzana (BOFIT) |
| Abstract: | This paper investigates the relationship between fiscal policy and output volatility in Russian regions between 2000 and 2009. System GMM estimation techniques are used to account for potential endogeneity between output volatility and fiscal developments. Our main finding is that fiscal activism, proxied by various measures of discretionary fiscal policy, contributes to output volatility and so induces macroeconomic instability at the regional level in Russia. This result corroborates previous studies using cross-country data. To reduce business cycle fluctuations, it would be necessary to curtail pro-cyclical fiscal activism at the regional level, e.g. via fiscal rules and sound institutions of fiscal federalism. |
| Keywords: | output volatility; automatic stabilizers; discretionary fiscal policy; dynamic panel models; Russia |
| JEL: | E32 E62 R11 |
| Date: | 2013–06–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2013_013&r=pbe |
| By: | Oliver Denk |
| Abstract: | Italy’s policy of fiscal consolidation and growth-friendly structural reforms has substantially improved its economic prospects, but the adverse sentiment that the country has faced in the sovereign bond market over the past years has deep roots. It reflects lingering anxieties over the euro area’s future, as well as persistent economic and financial difficulties, in particular the high level of public debt and low potential growth. The government has rightly aimed to halt the rise in the public debt-to-GDP ratio and put it on a downward path. This could be achieved with either a balanced government budget or a small fiscal surplus. While additional fiscal tightening would have negative effects on output in the short term, it would be rewarded by faster debt reduction and lower risk of renewed financial-market reactions. In any case, the automatic stabilisers should be allowed to work.<p> Concerns about fiscal sustainability and the prolonged recession have spilled over to the financial sector. Lending conditions are tight, non-performing loans are high and rising, and capital has flowed out of Italy to the core countries of the euro area. The Bank of Italy should continue to ensure that banks increase provisions against losses, and strengthen their capital asset position by raising new equity from private sources, including from foreign stakeholders, by retaining earnings and by disposing of non-core assets. Resolution of the fiscal, economic and financial crisis in Italy depends in part on action at the euro area level. As a member of the euro area, Italy has benefited from the establishment of the European Stability Mechanism, the announcement by the European Central Bank of the Outright Monetary Transactions scheme and the plans for a euro-area banking union.<P>L'Italie et la crise de la zone euro : Assurer la viabilité des finances publiques et la stabilité financière<BR>La politique d’assainissement des finances publiques de l’Italie et ses réformes structurelles porteuses de croissance ont nettement amélioré ses perspectives économiques, mais il reste que la mauvaise image du pays sur le marché de la dette souveraine, ces dernières années, a des causes profondes. Celle-ci est le signe d’inquiétudes persistantes quant à l’avenir de la zone euro et de difficultés économiques et financières qui perdurent, notamment le haut niveau de la dette publique et la faiblesse du potentiel de croissance. Le gouvernement s’est à juste titre fixé comme objectif de donner un coup d’arrêt à la hausse du ratio dette publique/PIB et de l’orienter ensuite à la baisse. Un budget public équilibré, ou bien un léger excédent budgétaire, pourraient lui permettre d’y parvenir. Un tour de vis budgétaire supplémentaire aurait certes des effets négatifs transitoires sur la production, mais il devrait être suivi d’une réduction plus rapide de la dette et d’une diminution du risque de nouvelles réactions des marchés financiers. En tous cas, il conviendra de laisser jouer les stabilisateurs automatiques. Les inquiétudes quant à la viabilité budgétaire et à la récession qui dure ont rejailli sur le secteur financier. Les conditions de prêt sont restrictives, le stock de prêts non productifs important et en hausse tandis que les capitaux quittent l’Italie en direction des pays du coeur de la zone euro. La Banque d’Italie doit veiller à ce que les banques augmentent leur niveau de provisions pour pertes et renforcent leur position en actifs financiers en levant de nouveaux capitaux auprès de sources privées, y compris auprès d’actionnaires étrangers, en réinvestissant leurs bénéfices et en se débarrassant de leurs actifs non essentiels. La résolution de la crise budgétaire, économique et financière en Italie dépend en partie de l’action menée au niveau de la zone euro. L’Italie étant membre de la zone euro, elle a bénéficié de la création du Mécanisme européen de stabilité, de l’annonce du programme d’opérations monétaires sur titres de la Banque centrale européenne et des projets d’union bancaire de la zone euro. |
| Keywords: | public debt, Italy, fiscal sustainability, budget deficit, financial stability, non-performing loans, banking system, fiscal council, balanced-budget rule, capital ratios, loan loss provisions, pension reforms, TARGET2, dette publique, Italie, déficit budgétaire, stabilité financière, viabilité des finances publiques, prêts non productifs, système bancaire, réforme des retraites, conseil budgétaire, ratios de fonds propres, règle d’équilibre des finances publiques, prêts dispositions pour pertes, TARGET2 |
| JEL: | E5 E6 G2 H5 H6 |
| Date: | 2013–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1065-en&r=pbe |
| By: | Matevz Hribernik; Rafal Kierzenkowski |
| Abstract: | This paper derives estimates of the efficiency of welfare spending in Slovenia and the other OECD countries from data envelopment analysis based on model specifications used in earlier OECD studies. Results suggest that Slovenia ranks about 25th among OECD countries for output efficiency: for a given level of spending outcomes fall short by around 3.5% in health care, by 10% in secondary education and by around one third in public administration. Results also suggests that Slovenia ranks 18th to 27th in the OECD for input efficiency as the same outcomes could be reached by scaling back costs by around half. Alternatively, spending increases could be contained and outcomes improved by increased cost efficiency. Statistical uncertainty surrounding input efficiency estimates is high for countries with the smallest scope for potential savings. Confidence intervals around output efficiency scores are also wide for some emerging market economies.<P>Évaluation de l'efficacité des dépenses sociales en Slovénie avec la méthode d'enveloppement des données<BR>Cet article déduit les estimations de l'efficacité des dépenses sociales en Slovénie et dans les autres pays de l'OCDE à partir de l'analyse d'enveloppement des données basée sur les spécifications de modèles utilisés dans les études antérieures de l'OCDE. Les résultats suggèrent que la Slovénie se classe 25ème parmi les pays de l'OCDE pour l’efficacité productive: pour un niveau donné de dépenses les résultats sont en deçà d'environ 3,5% dans les soins de santé, de 10% dans l'enseignement secondaire et d'environ un tiers dans l'administration publique. Les résultats suggèrent également que la Slovénie se classe entre le 18ème et 27ème rang au sein de l'OCDE pour l'efficacité des intrants puisque les mêmes résultats peuvent être obtenus en réduisant les coûts de moitié environ. Alternativement, les hausses de dépenses pourraient être contenues et les résultats améliorés grâce à une meilleure efficacité-coût. L'incertitude statistique entourant les estimations de l'efficacité des intrants est élevée pour les pays ayant la plus faible marge de manoeuvre en termes d'économies potentielles. Les intervalles de confiance autour des scores d'efficacité productive sont également larges pour certains pays émergents. |
| Keywords: | health, OECD, efficiency, Slovenia, PISA, secondary education, public administration, data envelopment analysis, welfare spending, santé, OCDE, administration publique, Slovénie, PISA, efficacité, dépenses sociales, enseignement secondaire, méthode d’enveloppement des données |
| JEL: | C14 H83 I18 I28 I38 |
| Date: | 2013–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1058-en&r=pbe |
| By: | Philipp Breidenbach; Timo Mitze |
| Abstract: | Transport infrastructure is viewed as an important determinant of regional growth and development. While this prediction especially holds from a theoretical perspective based on endogenous growth theories, from an empirical perspective it is not easy to verify this causal link, though. The main reason for this diffi culty is that it is hard to measure whether transport infrastructure is indeed the exogenous driver of regional development or whether it is rather an endogenous reflection of the higher transportation demand in prospering regions. In this paper, we analyse the long-run effect of port facilities on regional income levels in Germany. Since it is very likely that the “reversed causality” problem applies to our sample setting, we use an identification strategy that is based on exogenous longrun instruments. In particular, port facilities built before the industrial revolution (about 1850 in Germany) can be seen as an adequate instrument for current port infrastructure since they are exogenous to recent economic development. Using German regional data for 1991–2008, our results hint at a positive correlation between port locations and regional per capita GDP, but do not provide evidence for a causal relationship. For the regional variation of population levels as a more general indicator for agglomeration effects, the causal relationship running from port infrastructure provision to increasing population levels holds nonetheless. |
| Keywords: | Port infrastructure; regional income; causal effects; IV |
| JEL: | C26 R12 R40 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0420&r=pbe |
| By: | AKAO Ken-Ichi; SAKAMOTO Hiroaki |
| Abstract: | We examine the long-term consequences to economic growth of disasters using a discrete-time endogenous growth model. We consider two types of hypothetical disasters: historical disasters, which follow a Bernoulli process, and periodic disasters, which are taken as a regular event by assuming that one period is a sufficient time period. We show that the effects of historical disasters on the steady state growth rate depend on the intertemporal elasticity of substitution for consumption. Specifically, when it is less than one, more destructive disasters or more frequent occurrence of historical disasters foster investment in human capital, which results in a higher economic growth rate. This conditionally supports the empirical finding: disasters may positively affect long-run economic growth. We also show the effects of historical and periodic disasters on resource allocation and industrial composition at the steady state and on the convergence speed. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:13061&r=pbe |
| By: | Pfaff, Tobias |
| Abstract: | Theory suggests that subjective well-being is affected by income comparisons and adaptation to income. Empirical tests of the effects often rely on self-constructed measures from survey data. This paper shows that results can be highly sensitive to simple parameter changes. Using large-scale panel data from Germany and the UK, I report cases where plausible variations in the underlying income type substantially affect tests of the relationship between life satisfaction, income rank, reference income, and income adaptation. Models simultaneously controlling for income and income rank as well as models with a number of income lags are prone to imperfect multicollinearity with consequences for the precision and robustness of estimates. When testing relative-income effects, researchers should be aware that reference income constructed as average of a rather arbitrarily defined reference group and reference income predicted from Mincer-type earnings equations are two approaches that can produce inconsistent results, and that are probably not as reliable and valid as previously assumed. The analysis underlines the importance of robustness checks and regression diagnostics, two routines that are often not carried out diligently in empirical research. -- Der Theorie nach wird subjektives Wohlbefinden von Einkommensvergleichen und Einkommensanpassungseffekten beeinflusst. Empirische Tests dieser Effekte verwenden oft selbstkonstruierte Messgrößen aus Umfragedaten. Dieser Artikel zeigt, dass Ergebnisse sehr sensitiv gegenüber einfachen Parameterveränderungen sein können. Unter Verwendung großer Paneldatensätze aus Deutschland und Großbritannien zeige ich Fälle, in denen plausible Veränderungen der zugrundeliegenden Einkommensart substantiellen Einfluss auf Tests des Zusammenhangs zwischen Lebenszufriedenheit, Einkommensrang, Referenzeinkommen und Einkommensanpassung haben. Modelle die simultan für Einkommen und Einkommensrang kontrollieren sowie Modelle mit einigen Lags der Einkommensvariable sind anfällig für imperfekte Multikollinearität mit entsprechenden Konsequenzen für Präzision und Robustheit der Schätzer. Forscher sollten bei Tests von relativen Einkommenseffekten darauf achten, dass Referenzeinkommen konstruiert als Durchschnitt einer recht willkürlich definierten Referenzgruppe sowie Referenzeinkommen, das mit einer Lohngleichung des Mincer-Typs prognostiziert wird, zwei Ansätze sind, die inkonsistente Ergebnisse liefern können und daher möglicherweise nicht so verlässlich und valide sind, wie bislang angenommen. Die Analyse unterstreicht die Bedeutung von Robustheitschecks und Regressionsdiagnostik - zwei Routineprozesse, die in empirischen Studien oft nicht gründlich durchgeführt werden. |
| Keywords: | subjective well-being,life satisfaction,relative income,income rank,adaptation,subjektives Wohlbefinden,Lebenszufriedenheit,relatives Einkommen,Einkommensrang,Adaptation |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ciwdps:52013&r=pbe |
| By: | Agha, Nola; Rascher, Daniel |
| Abstract: | This explanatory research reviews the economic impact literature to identify the conditions that would theoretically allow any sport, large or small, to generate positive economic effects. Nine conditions are identified that, when present, could allow a community to experience a positive economic impact from a team or stadium. The nine conditions are then used to explain the discrepancy in known empirical outcomes in Major and Minor League Baseball. It appears as if major league teams are more likely to violate the conditions while minor league teams are not. This research finds theoretical support for previous suggestions that smaller teams and events may be beneficial to local economies. In doing so, it also explains previous empirical results that found some minor league baseball classifications are associated with positive gains in per capita income. |
| Keywords: | economic impact, minor league baseball, MLB, stadiums, efficiency |
| JEL: | L83 |
| Date: | 2013–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:48016&r=pbe |
| By: | Rifin, Amzul; Nauly, Dahlia |
| Abstract: | The government of Indonesia implemented an export tax policy on cocoa beans since April 2010 in order to develop cocoa processing industry. The objective of this article is to analyze the effect of export tax on Indonesia’s cocoa export competitiveness. The results indicate that with the implementation of export tax, cocoa export product composition shift from cocoa beans to processed cocoa products. On the other hand, Indonesia’s cocoa export growth is lower than the growth of cocoa world demand which is mainly caused by the decrease of competitiveness. Comparing the three cocoa beans producer, Ghana has gain competitiveness in 2011 compare to 2009. |
| Keywords: | cocoa, export tax, competitiveness, Crop Production/Industries, Demand and Price Analysis, International Relations/Trade, Production Economics, |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare13:152175&r=pbe |