the phillips curve macroeconomic policy and the welfare of canadians a review of the two competing paradigms explaining inflation and unemployment fluctuations singles out the keynesian phillips curve as the clear empirical winner over its classic competitors reestimation of the canadian phillips curve for 1957 90 identifies a sharp structural shift toward a high degree of unemployment hysteresis after 1972 the recent attempt of macropolicy to flatten the aggregate demand curve and limit supply side shock accommodation which aims at lower and more stable inflation is then shown to make unemployment higher and more unstable on average to an extent that is an increasing function of the degree of hysteresis understanding and reducing hysteresis and developing a consensus based incomes policy that has a chance of alleviating the dismal trade off should therefore to top research and policy priorities

taxation and international migration of superstars evidence from the european football market we analyze the effects of top tax rates on international migration of football players in 14 european countries since 1985 both country case studies and multinomial regressions show evidence of strong mobility responses to tax rates with an elasticity of the number of foreign domestic players to the net of tax rate around one around 0 15 we also find evidence of sorting effects low taxes attract highability players who displace low ability players and displacement effects low taxes on foreigners displace domestic players those results can be rationalized in a simple model of migration and taxation with rigid labor demand jel f22 h24 h31 j44 j61 l83

interactions between renewable energy policy and renewable energy industrial policy a critical analysis of china s policy approach to renewable energies this paper analyzes china s policy approach to renewable energies and assesses how effectively china has met the ideal of appropriate interactions between renewable energy policy and renewable energy industrial policy first we briefly discuss the interactions between these two policies then we outline china s key renewable energy and renewable industrial policies and find that china s government has well recognized the need for this policy interaction after that we study the achievements and problems in china s wind and solar pv sector during 2005 2012 and argue that china s policy approach to renewable energies has placed priority first on developing a renewable energy manufacturing industry and only second on renewable energy itself and it has not effectively met the ideal of appropriate interactions between renewable energy policy and renewable energy industrial policy lastly we make an in depth analysis of the three ideas underlying this policy approach that is the green development idea the low carbon leadership idea and indigenous innovation idea we conclude that chinas policy approach to renewable energies needs to enhance the interactions between renewable energy policy and renewable energy industrial policy the paper contributes to a deeper understanding of china s policy strategy toward renewable energies

should commuting expenses be tax deductible a welfare analysis abstract this paper asks whether or not commuting expenses should be tax deductible in order to answer this question a simple multiregion model of im perfect household and worker mobility is employed the paper shows that deductibility is clearly inefficient only if households are perfectly mobile and if households cannot choose their place of work if the region of work is not exogenously fixed commuting expenses should be deductible at more than 100 even if households choose simultaneously the place of work and the region of residence and even if tax rates are not standardized within the federation

income taxes and urban spatial structure abstract this paper examines the impact of an income tax in a monocentric city where households equilibriate their allocation of time between work commuting and leisure an increase in the income tax rate lowers the implicit value of time and hence transportation costs compensated equilibrium comparative statics analysis shows that under certain conditions this results in a larger more dispersed urban area with lower land rents at the city center and less population within any given distance from the center the welfare effect of an income tax rate change is also studied and an expression for the marginal excess burden is derived the income tax produces welfare losses both because it induces substitution in favor of leisure and in favor of travel the latter accompanied by excessive spatial dispersion and consumption of space the marginal excess burden depends not only on the compensated demand elasticity for leisure but also on that for space finally the problem of benefit measurement for transportation projects in this tax distorted spatial economy is examined benefit measures should be deflated to adjust for the fact that further transportation improvements lead to reduction of land use intensity exacerbating the problem of spatial resource misallocation in an already excessively dispersed urban area

networking off madison avenue known for the key role that networking plays in the operation of agencies where interviews suggest that informal networking among close neighbors is critical to many agencies success networking involves the exchange of ideas and while there is no market place for these ideas exchanges may be more deliberate rather than just marshall s 1890 mysteries of the air type of information spillovers this paper examines the effect on productivity of having more near advertising agency neighborhoods and hence better opportunities for meetings and exchange within manhattan we will show that there is extremely rapid spatial decay in the benefits of having more near neighbors even in the close quarters of southern manhattan a finding that is new to the empirical literature and indicates our understanding of scale externalities is still very limited the finding indicates that having a high density of commercial establishments is important in enhancing local productivity an issue in lucas and rossi hansberg 2002 where within business district spatial decay of spillovers plays a key role we will argue also that in manhattan advertising agencies trade off the higher rent costs of being in bigger clusters nearer centers of action against the lower rent costs of operating on the fringes away from high concentrations of other agencies introducing the idea of trade offs immediately suggests heterogeneity is involved we will show that higher quality agencies are the ones willing to pay more rent to locate in greater size clusters specifically because they benefit more from networking while all 1 the research in this paper was conducted while the authors were census bureau research associates at the boston research data center research results and conclusions expressed are those of the authors and do not necessarily indicate concurrence by the census bureau the paper has been screened to ensure that no confidential data are revealed we acknowledge helpful comments from andrew foster on aspects of the paper and from participants in seminars at brown university lse and the university of toronto

levelized cost of electricity lcoe of renewable energies and required subsidies in china newhuadu business school research fund china sustainable energy program g 1305 18257 national social science foundation of china 12zd059 ministry of education 10 jbg 013

changes in transportation infrastructure and commuting patterns in us metropolitan areas 1960 2000 population decentralization has been a salient feature of the landscape of most u s urban areas since 1950 nathaniel baum snow 2007 documents that the aggregate population of central cities of the 139 largest metropolitan areas henceforth msas declined by 17 percent between 1950 and 1990 while aggregate msa population growth was 72 percent during this period expansion of the highway network in urban areas accounts for about one third of the gap in central city and msa population growth rates while transport network expansions clearly generated urban population decentralization there is little evidence to date on how this decentralization manifested itself as changes in employment locations and commuting patterns in this paper i present evidence indicating that employment decentralization occurred apace with residential decentralization between 1960 and 2000 such that their relative spatial concentrations remained remarkably unchanged a byproduct has been that most commutes of msa residents no longer involve central cities at all central cities as defined by their geographies in 1960 were the origin and or destination of only 38 percent of commutes made by msa residents in 2000 down from 66 percent in 1960 using planned portions of the interstate highway system as a source of exogenous variation estimates reported in section iii indicate that urban highway construction played a pivotal role in generating this shift new highways primarily increased the number and fraction of commuting flows within suburban areas at the expense of commutes within central cities because within suburb commutes are longer than other types of commutes on average results are consistent with gilles duranton matthew turner s 2009 evidence that the elasticity of kilometers driven with respect to lane kilometers of highways in urban areas is one 1

lessons from photovoltaic policies in china for future development abstract the paper first provides an overview of the current status of pv industry development in china including the penetration speed the market segments and the value chain further it reviews the experience of governmental interventions composed of the legal framework market incentives and manufacturing policies for lessons learning after the renewable energy law took effect in 2006 pv penetration was accelerated capital subsidies and feed in tariffs which were still in a trial stage public bidding and the cooperation among relevant ministries played important roles a series of public rd the budget and the organization of public pv r d were insufficient finally we propose some recommendations on improving policy interventions

a fractionally cointegrated var analysis of economic voting and political support we use a fractionally cointegrated vector autoregressive model to examine the relationship between canadian political support and macroeconomic conditions this model is well suited for the analysis because it allows multiple fractional time series and admits simple asymptotic inference for the model parameters and tests of the hypotheses of interest in the long run equilibrium we find that support for the progressive conservative party was higher during periods of high interest rates and low unemployment while support for the liberal party was higher during periods of low interest rates and high unemployment we also test and reject the notion that party support is driven only by relative to the united states economic performance indeed our findings suggest that us macroeconomic variables do not enter the long run equilibrium of canadian economic voting political opinion poll support at all resume une application du modele vecteur autoregressif fractionnellement cointegre sur le vote economique et le support politique on utilise un modele du type vecteur autoregressif fractionnellement cointegre pour examiner la relation entre le support politique canadien et les conditions macroeconomiques le modele est bien adapte a l analyse parce qu il permet l usage de multiples series chronologiques fragmentees et une inference asymptotique simple des parametres du modele ainsi que des tests d hypothese pertinents en equilibre a long terme on decouvre que le support pour le parti progressiste conservateur a ete plus eleve au cours des periodes de hauts taux d interet et bas taux de chomage alors que le support pour le parti liberal a ete plus eleve au cours des periodes de bas taux d interet et de hauts taux de chomage on met au test l hypothese qu on rejette d ailleurs que la notion que le support politique est enclenche seulement par la performance economique du canada par rapport a celle des etats unis en fait les resultats suggerent que les variables macroeconomiques americaines n ont pas du tout d impact sur l equilibre a long terme du vote economique canadien support dans les sondages d opinion politique

inefficiencies from metropolitan political and fiscal decentralization failures of tiebout competition we examine the welfare effects of provision of local public goods in an empirically relevant setting using a multi community model with mobile and heterogeneous households and with flexible housing supplies we characterize the first best allocation and show efficiency can be implemented with decentralization using head taxes we calibrate the model and compare welfare in property tax equilibria both decentralized and centralized to the efficient allocation inefficiencies with decentralization and property taxation are large dissipating most if not all the potential welfare gains that efficient decentralization could achieve in property tax equilibrium centralization is frequently more efficient an externality in community choice underlies the failure to achieve efficiency with decentralization and property taxes poorer households crowd richer communities and free ride by consuming relatively little housing thereby avoiding taxes copyright oxford university press

the unequal geographic burden of federal taxation in the united states workers in cities offering above average wages cities with high productivity low quality of life or inefficient housing sectors pay 27 percent more in federal taxes than otherwise identical workers in cities offering below average wages according to simulation results taxes lower long run employment levels in high wage areas by 13 percent and land and housing prices by 21 and 5 percent causing locational inefficiencies costing 0 23 percent of income or 28 billion in 2008 employment is shifted from north to south and from urban to rural areas tax deductions index taxes partially to local cost of living improving locational efficiency

how green management influences product innovation in china the role of institutional benefits does being green facilitate product innovation this study examines whether green management in firms operating in china fosters radical product innovation to a greater extent than it does incremental product innovation and investigates the underlying institutional mechanisms involved in the relationship between green management and product innovation the findings show that green management is more likely to lead to radical product innovation than to incremental product innovation moreover government support as a formal institutional benefit more strongly mediates the effect of green management on radical product innovation than its effect on incremental product innovation whereas social legitimacy as an informal institutional benefit more strongly mediates the effect of green management on incremental product innovation than its effect on radical product innovation these findings provide important implications for explaining how firms employ green management to facilitate product innovation 2014 springer science business media dordrecht

on real and sticky price theories of the business cycle after presenting some facts about the growth of government in western industrialized countries possible causes of this development are analyzed from a public choice perspective next some empirically tested theories which seek to explain this growth are discussed finally possible consequences for efficiency and individual liberty are examined it is shown that both the number and size of interest groups age of democracy as stated by mancur olson 1982 and the increasing share of government expenditure in gdp seem to exert a negative influence on the growth rate of gdp copyright 1986 by ohio state university press

a new approach to decomposition of economic time series into permanent and transitory components with particular attention to measurement of the business cycle abstract this paper introduces a general procedure for decomposition of non stationary time series into a permanent and transitory component allowing both components to be stochastic the permanent component is shown to be a random walk with drift and the transitory or cyclical component is a stationary process with mean zero the decomposition methodology which depends only on past data and therefore is computable in real time is applied to the problem of measuring and dating business cycles in the portwar u s economy we find that measured expansions and contractions are of roughly equivalent duration and that our dating of cyclical episodes tends to lead the traditional nber dating and to a lesser extent the growth cycle chronology of zarnowitz and boschan 1977

unemployment hysteresis in canada an approach based on long memory time series models long memory univariate time series models known as arfima are applied to measure shock persistence for canada and the usa both output and unemployment exhibit higher persistence in canada than in the usa the finding that the rate of unemployment in canada exhibits high shock persistence supports the notion of hysteresis in unemployment the analysis of disaggregated canadian unemployment rates indicates that hysteresis is most pronounced for adult male workers the same class of models is used to obtain a generalization of the beveridge nelson decomposition of time series into a permanent and a cyclical component the permanent component of the canadian unemployment rate exhibits a kink in the early 1970s

hyperbolic discounting and the phillips curve using a standard dynamic general equilibrium model we show that the interaction of staggered nominal contracts with hyperbolic discounting leads to inflation having significant long run effects on real variables

long memory in foreign exchange rates using the geweke porter hudak test we find evidence of long memory in exchange rate data this implies that the empirical evidence of unit roots in exchange rates may not be robust to long memory alternatives fractionally integrated autoregressive moving average arfima models are estimated by both the time domain exact maximum likelihood ml method and the frequency domain approximate ml method impulse response functions and forecasts based on these estimated arfima models are evaluated to gain insight into the long memory characteristics of exchange rates some tentative explanations of the long memory found in the exchange rates are discussed

overall review of renewable energy tariff policy in china evolution implementation problems and countermeasures abstract the rapid growth of china s economy has accelerated its energy demand which is becoming more urgent it is essential to exploit renewable energy because of the limited conventional energy high energy consumption and serious pollution china will strengthen the development and utilization of wind solar biomass and other renewable energies in the future which will reduce the level of carbon emissions however china s rapid growth in renewable energy particularly wind has been accompanied with some growing pains and there is room for improving the legal framework to address these challenges a reasonable renewable energy tariff policy has a pivotal role for changing china s current situation this paper introduced the current development situation of renewable energy analyzed the evolution and implementation effect of the renewable energy tariff policy and discussed the problems of the renewable energy tariff policy in china on this basis this article proposed feasibility tariff policy recommendations to solve the problems which important theory significance and the practical application value

income taxes and the destination of movers to multistate msas abstract we examine how differences in state income tax rates as well as other state and local taxes and public service expenditures influence the choice of state of residence for households federal tax filers moving into multistate metropolitan areas msas using data from the irs on the migration of taxpayers msas that are on borders provide a spatial discontinuity discrete differences in state tax rates within a single labor market these msas allow residents to live in one state and work in another state we find that differences in state income tax rates have a significant impact on the relative rate of migration to the states within an msa however contrary to what would be expected this impact is only significant in msas in which the filing state is based on employment states without reciprocity and not for those states in which the filing state is the state of residence states with reciprocity in msas where states do not have reciprocity agreements a difference of ten percent in tax rates leads to a 4 1 percent difference in the relative rate of incoming taxpayers analogously we find that a ten percent difference in state tax rates in these msas results in a 3 3 percent difference in the rate of tax base inflow agi our results suggest that one reason that differences in state income taxes appear to have more impact in multistate msas without reciprocity is that only relatively large differences in state income tax rates have any impact on migration and these differences are much more pronounced in msas without reciprocity

urban growth and transportation we estimate the effects of interstate highways on the growth of u s cities between 1983 and 2003 we find that a 10 increase in a city s initial stock of highways causes about a 1 5 increase in its employment over this 20 year period to estimate a structural model of urban growth and transportation we rely on an instrumental variables estimation that uses a 1947 plan of the interstate highway system an 1898 map of railroads and maps of the early explorations of the u s as instruments for 1983 highways we investigate the role of interstate highways in the growth of u s cities our investigation is in three parts in the first we develop a simple structural model describing the joint evolution of highways and employment in cities in the second we develop an instrumental variables strategy that allows us to identify key parameters of our structural model we are also able to provide out of sample evidence for the validity of our estimates and for the central assumptions of our model in the third we use our estimates to assess counterfactual transportation policies we find that a 10 increase in a city s stock of interstate highways causes about a 1 5 increase in its employment over 20 years and that an additional kilometre of highway allocated to a city at random is associated with a larger increase in employment or population than is a road assigned to a city by the prevailing political process our results also suggest that too many new highways were built between 1983 and 2003 these findings are important for three reasons first transportation generally and infrastruc ture in particular are large segments of the economy the median u s household devotes about 18 of its income to road transportation while all levels of government together spend another 200 billion dollars annually overall the value of capital stock associated with road transporta tion in the u s tops 5 trillion dollars united states bureau of transportation statistics 2007 2010 given the magnitude of transportation expenditures it is important that the impact of these expenditures on economic growth be carefully evaluated and not assessed on the basis of the claims of advocacy groups our analysis provides a basis for assessing whether these resources are well allocated our results also provide useful guidance to policy makers charged with planning cities since changes in a city s transportation infrastructure cause changes to the city s employment new transportation infrastructure causes complementary changes in the demand for public utilities and schools our results provide a basis for estimating the magnitude of such changes finally this research is important to furthering our understanding of how cities operate and grow transportation costs are among the most fundamental quantities in theoretical models

the economics of density evidence from the berlin wall this paper develops a quantitative model of internal city structure that features agglomeration and dispersion forces and an arbitrary number of heterogeneous city blocks the model remains tractable and amenable to empirical analysis because of stochastic shocks to commuting decisions which yield a gravity equation for commuting flows to structurally estimate agglomeration and dispersion forces we use data on thousands of city blocks in berlin for 1936 1986 and 2006 and exogenous variation from the city s division and reunification we estimate substantial and highly localized production and residential externalities we show that the model with the estimated agglomeration parameters can account both qualitatively and quantitatively for the observed changes in city structure we show how our quantitative framework can be used to undertake counterfactuals for changes in the organization of economic activity within cities in response for example to changes in the transport network

analysis of the policy effects of downstream feed in tariff on china s solar photovoltaic industry abstract the chinese government initiated the feed in tariff fit policy for downstream power generation in august 2013 the effectiveness of the downstream fit policy has attracted the attention of academia and government using the quarterly data of listed solar pv companies between 2009 and 2015 this paper provides an empirical analysis regarding the effects of the downstream fit policy we find that 1 the fit policy has significantly enhanced the inventory turnover of listed pv firms and improved their profitability 2 the fit policy has significant effects on the inventory turnover of midstream companies and mixed industry chain companies mainly engaged in downstream operations 3 fit policy is more favorable towards increasing the inventory turnover of private enterprises our results indicate that the fit policy can have substantial effects on the sustainable development of china s solar photovoltaic industry

an innovation management approach for renewable energy deployment the case of solar photovoltaic pv technology abstract in the discussion of renewable energy deployment one key concern is the various types of barriers that renewable energy needs to overcome before it can make its way into the mainstream these barriers increasingly shift from the technical to the economic and institutional the most general types of barriers are due to technological lock out or to carbon lock in unruh g 2000 understanding carbon lock in energy policy 28 12 817 830 elsevier these barriers necessitate the development of a strategic approach to deploy or introduce renewable energy technology existing energy policy has mostly relied upon financial subsidies market based instruments such as renewable portfolio standards and production tax credits to stimulate the installation and use of equipment to generate electricity from renewable sources these strategies target mostly system level decisions of end users the purpose of this paper is to present an innovation perspective on the renewable energy deployment process by introducing the innovation value added chain ivc framework the analytical objective of ivc is to evaluate the impact of a new innovation on the various stakeholders and players in the development and deployment processes a deployment or innovation strategy that causes minimal disruption enhances existing competencies or expedites new learning by the players has a higher chance to succeed we draw upon two sets of system integration costs data for grid connected distributed photovoltaic pv systems in japan and the united states and demonstrate conspicuously different dynamic learning behaviors these two deployment models can be understood in terms of how the ivcs are organized and how pv system integration projects are performed in the field in addition ivc based findings can inform the targeted application of conventional financial subsidies for learning investment not only at the pv system level but also at the localized system integration level this would involve other stakeholders thus suggesting new energy policy space we highlight some future research directions using the ivc framework

long memory and persistence in aggregate output abstract we examine persistence in u s aggregate output by estimating fractionally integrated arima models these models provide better low frequency approximations to the wold representation than previous stochastic specifications and earlier results on the importance of a permanent component emerge as special cases we find evidence of long memory which induces persistence though this long memory need not be associated with a unit root our point estimates indicate that macroeconomic shocks while persistent are distinctly less persistent than many earlier studies suggest however confidence intervals associated with the long run response are quite wide

review on the costs and benefits of renewable energy power subsidy in china abstract nowadays renewable energy plays a vital role in the sustainable development of a society in china renewable energy power has developed rapidly since the implementation of renewable energy act through a series of specific incentive measures especially subsidy policies china s renewable energy power has made great achievements both in technology and application based on the state of the art of renewable energy power this paper comprehensively analyzed the costs and benefits of renewable energy power subsidy in china the analysis results show the cost of renewable energy power subsidy was 0 248 cny kwh between 2006 and april 2011 which was distributed among different renewable energy power types including wind power biomass power and solar pv power or categories including electricity price accessing grid projects and public independent renewable energy power system on the other hand the renewable energy power subsidy also brings benefits to different aspects of the society specifically the environmental benefit amounted to 17 88 billion cny and the benefits of guaranteeing energy security advancing technology innovation and promoting economic development were also noteworthy

long memory in inflation rates international evidence we examine monthly inflation rates of five industrial countries the application of tests against stationarity as well as tests against a unit root yield contradictory results thus fractional integration allowing for long memory is a plausible model we discuss and apply the periodogram regression to estimate the difference parameters for all countries we find estimates significantly different from 1 as well as from 0 this is evidence in favor of long memory specification tests and maximum likelihood estimates support the fitted models finally we relate our empirical results to the construction of the data

a test for allocative efficiency in the local public sector abstract this paper develops a test for pareto efficiency in the local public sectorusing the analytical result that aggregate property value is maximized at the public output level which satisfies the samuelson condition for efficiency by using cross section data it is possible to deduce whether a representative community provides its public goods in a property value maximizing and hence efficient fashion the empirical results show no systematic tendency to either under or over provide public goods in a sample of massachusetts communities

how natural is canada s high unemployment rate abstract a reduced form price equation for canada 1956 1984 yields a stable estimate of 4 9 percent for the natural unemployment rate of men aged 25 and over with strong evidence against hysteresis once structural influences are accounted for the resulting profile for the aggregate natural unemployment rate rises smoothly from 5 5 percent in 1961 to a maximum of 8 0 percent in 1977 1978 and then declines rapidly to 6 4 percent in 1985 calculations based on an estimated production structure for the aggregate non energy sector of canada provide additional evidence against the excess real wage hypothesis and for the view that the recent fluctuations in canada s unemployment rate are mostly of the keynesian variety

modeling long run behavior with the fractional arima model abstract when modeling long run behavior fractional arima models can give insights unobtainable with the nonfractional arima models as an application the deterministic trend and unit root with drift models are nested in the fractional arima model this allows testing between the two models based on estimated parameter values this test is applied to postwar us quarterly real gnp the test concludes that gnp is consistent with both models the estimated fractional parameter is significantly smaller than reported in diebold and rudebusch 1989 the difference is explained by bias in the previous estimates relationships with the cumulative impulse response and spectral density at frequency zero are noted

wages rents and the quality of life this study focuses on the role of wages and rents in allocating workers to locations with various quantities of amenities the theory demonstrates that if the amenity is also productive then the sign of the wage gradient is unclear while the rent gradient is positive the theory is extended to include the housing market and nontraded goods these extensions require little modification of the conclusion the empirical work on wages shows that the regional wage differences can be explained largely by these local attributes with the use of site price data implicit prices are estimated and quality of life rankings for the cities are computed

cost and co2 reductions of solar photovoltaic power generation in china perspectives for 2020 abstract to improve the understanding of the cost and benefit of photovoltaic pv power generation in china we analyze the per kwh cost fossil energy replacement and level of co2 mitigation as well as the cost per unit of reduced co2 of pv power generation in 2020 at the province level three potential pv systems are examined large scale pv lspv building integrated pv bipv and distributed pv systems used in remote rural areas which have very low capacities the results show that in 2020 pv power generation could save 17 4 mtce fossil energy and 46 5 tg co2 compared with 600 mwe coal fired supercritical units also in 2020 the costs of solar electricity could be reduced by approximately 60 as compared to 2010 but would still be 11 74 higher than the current grid prices the pv electricity costs vary significantly among provinces in the economically developed eastern provinces the pv electricity mainly bipv is 0 67 0 86 rmb kwh this rate is close to grid parity owing to high grid prices but the co2 mitigation cost is high 456 693 rmb mg co2 the pv electricity mainly lspv in solar resource rich western provinces has lower cost 0 45 0 75 rmb kwh and lower co2 mitigation cost 172 419 rmb mg co2 but is farther from grid parity due to the low local grid price from a cost effective perspective lspv in the west provinces should be the first priority in pv deployment strategies and should receive strong financial support from the government this study provides a quantitative province specific analysis of pv power generation which can be used to support various pv subsidy policies

the elasticity of taxable income with respect to marginal tax rates a critical review this paper critically surveys the large and growing literature estimating the elasticity of taxable income with respect to marginal tax rates using tax return data first we provide a theoretical framework showing under what assumptions this elasticity can be used as a sufficient statistic for efficiency and optimal tax analysis we discuss what other parameters should be estimated when the elasticity is not a sufficient statistic second we discuss conceptually the key issues that arise in the empirical estimation of the elasticity of taxable income using the example of the 1993 top individual income tax rate increase in the united states to illustrate those issues third we provide a critical discussion of selected empirical analyses of the elasticity of taxable income in light of the theoretical and empirical framework we laid out finally we discuss avenues for future research jel h24 h31 j22

are output fluctuations transitory according to the conventional view of the business cycle fluctuations in output represent temporary deviations from trend the purpose of this paper is to question this conventional view if fluctuations in output are dominated by temporary deviations from the natural rate of output then an unexpected change in output today should not substantially change one s forecast of output in say five or ten years our examination of quarterly postwar united states data leads us to be skeptical about this implication the data suggest that an unexpected change in real gnp of 1 percent should change one s forecast by over 1 percent over a long horizon

on the power of dickey fuller tests against fractional alternatives abstract we examine the properties of dickey fuller unit root tests under fractionally integrated alternatives and find that these tests have quite low power

the attenuation of human capital spillovers abstract this paper uses 2000 census data to estimate the relationship of agglomeration and proximity to human capital to wages the paper takes a geographic approach and focuses on the attenuation of agglomeration and human capital effects differencing and instrumental variable methods are employed to address endogeneity in the wage agglomeration relationship and also to deal with measurement error in our agglomeration and human capital variables three key results are obtained first the spatial concentration of employment within five miles is positively related to wage second the benefits of spatial concentration are driven by proximity to college educated workers an instance of human capital spillovers third these effects attenuate sharply with distance

unemployment insurance and unemployment dynamics one of the puzzling features of the recent behavior of the canadian unemployment rate is its persistence in the presence of a sustained expansion in real national income neither deficient aggregate demand nor a once for all supply side induced increase in the natural rate provides a convincing explanation of this phenomenon this paper presents a model that explains how aspects of unemployment insurance in canada will cause persistence unemployment will be highly serially correlated even if output is not the authors document the increased persistence of the unemployment rate since 1977 and show that the model accounts for much of this phenomenon

permanent and transitory components in macroeconomic fluctuations fluctuations in real gnp have traditionally been viewed as transitory deviations from a deterministic time trend the purpose of this paper is to review some of the recent developments that have led to a new view of output fluctuations and then to provide some additional evidence using post war quarterly data it is hard to reject the view that real gnp is as persistent as a random walk with drift we also consider the hypothesis that the recent finding of persistence are due to the failure to distinguish the business cycle from other fluctuations in real gnp we use the measured unemployment rate to decompose output fluctuations we find no evidence for the view that business cycle fluctuations are more quickly trend reverting this abstract was borrowed from another version of this item

can carbon pricing support onshore wind power development in china an assessment based on a large sample project dataset abstract there is much discussion about whether the rapid expansion of onshore wind power in china is sustainable given the decrease in feed in tariffs fit it is unclear whether the recently launched nationwide carbon pricing system which will include 1700 power companies can compensate for decreasing fits and possibly provide new incentives for wind power developments this paper investigates the ability of carbon pricing policies to compensate for declining fits in support of onshore wind power investment in china first we constructed a dataset of 2059 onshore wind power projects from china s thirty provinces between 2006 and 2015 to estimate the levelized costs of electricity lcoe this dataset was used to assess the profitability of each wind project for different carbon prices varying levels of fits curtailment rate and discount rate our findings suggest that the carbon price can compensate partially for the revenue loss caused by declining fits as well as improving the profitability of projects however current carbon prices in china s carbon emission trading pilots are not sufficiently high to compensate for the revenue losses especially under the grid parity scenario consequently without fits the sustainable development of onshore wind power in china is uncertain a sensitivity analysis of the effect of the carbon pricing policy demonstrates that in the case of higher investment risk and more serious curtailment the effect of carbon pricing policy on promoting the wind power investment seems to be more significant

relocation of the rich migration in response to top tax rate changes from spanish reforms a spanish reform granted regions the authority to set income tax rates resulting in substantial tax differentials using administrative data we find that conditional on moving taxes have a signi

estimating persistence in canadian unemployment evidence from a bayesian arfima the degree of persistence in aggregate canadian unemployment is estimated within a bayesian arfima class of models the results conclude that unemployment exhibits persistence in the short and intermediate run the evidence of persistence is stronger than previously reported by koustas and veloce 1996 this persistence cast a vital implication regarding disinflation policies based on the unemployment rate these policies will prove very costly in terms of lost output and if implemented they considerably lengthen recessions

political economy of commuting subsidies abstract we study the political economy of commuting subsidies in a model of a monocentric city with two income classes depending on housing demand and transport costs either the rich or the poor live in the central city and the other group in the suburbs commuting subsidies increase the net income of those with long commutes or high transport costs they also affect land rents and therefore the income of landowners the paper studies how the locational pattern of the two income classes and the incidence of landownership affects the support for commuting subsidies

hysteresis and the earnings of immigrants in the united states labour market the paper analyses the role of hysteresis in explaining the slow wage convergence between certain immigrant groups and native workers using the 1990 integrated public use microdata samples ipums the analysis reveals that past earnings history in the country of origin has a relatively smaller effect on post migration earnings when compared to past earnings history in the us in addition the paper suggests that the earnings history in the country of origin is more productive in the us labour market for immigrants from advanced economies as compared to those from less developed countries in particular we find that us labour market does not value the past earnings history of mexican immigrants as high as that of other ethnic groups with similar socioeconomic characteristics across successive cohorts

tax avoidance and business location in a state border model abstract previous studies have struggled to demonstrate that higher taxes deter business activity we revisit this issue by estimating the effect of changes over time in cross border differences in state tax conditions on the tendency for new establishments to favor one side of a state border over the other identification is enhanced by taking account of previously overlooked reciprocal agreements that require workers to pay income tax to their state of residence as opposed to their state of employment when reciprocal agreements are in force higher personal income tax rates lure companies from across the border while corporate income tax and sales tax rates have the opposite effect where reciprocal agreements are not in place the results are largely reversed these patterns are amplified in heavily developed locations and differ in anticipated ways by industry and corporate non corporate status of the establishment overall results strengthen the view that state level tax policies do affect the location decisions of entrepreneurs and new business activity but not in a way that lends itself to a one size fits all summary

the deaton paradox in a long memory context with structural breaks this article contributes to the permanent income hypothesis pih and excess consumption smoothness debate in the context of fractional integration we show that the excess consumption smoothness result is a consequence of the quarterly data frequency commonly employed in the empirical work in fact the i 1 hypothesis is rejected for the income process with monthly data in favour of a fractional integration order lower than 1 moreover if a structural break is taken into account we observe a substantial reduction in the degree of consumption smoothness especially after the break found in 1975

subsidies for intracity and intercity commuting this paper analyzes subsidies for intracity and intercity commuting in an urban economics framework with two cities and agglomeration externalities where workers may commute within and between cities first commuting subsidies serve to internalize agglomeration externalities intracity commuting subsidies give incentives to move to the larger city and intercity commuting subsidies make residents of the periphery commute to the core second if agglomeration rents are locally captured commuting subsidies act as a welfare enhancing transfer from the core to the periphery

commuting and taxes theory empirics and welfare implications we examine the effect of interstate differences in income taxes on commuting times our theoretical model introduces a border into a model of an urban area and shows that differences in average tax rates distort commuting patterns but the sign of the effect depends on whether taxes are residence based or employment based empirically tax differentials have a large effect on commuting times for affluent households and mobile households we show that commuting times are a sufficient statistic to measure the spatial welfare effects of tax policy the model and empirical design can be used by economists to study other policy differences this article is protected by copyright all rights reserved