common trends the government s budget constraint and revenue smoothing abstract the requirement that the government s budget be balanced in present value terms is shown to be equivalent to the condition that government expenditures inclusive of interest tax receipts and seignorage be cointegrated the condition is in fact stronger requiring that the deficit inclusive of interest be stationary stationarity of the net of interest deficit is neither necessary nor sufficient for intertemporal budget balance however it does have implications for barro s tax smoothing hypothesis data for the period 1890 1986 are consistent with intertemporal budget balance but not with tax smoothing

single period multiproduct inventory models with substitution we study a single period multiproduct inventory problem with substitution and proportional costs and revenues we consider n products and n demand classes with full downward substitution i e excess demand for class i can be satisfied using product j for i j we first discuss a two stage profit maximization formulation for the multiproduct substitution problem we show that a greedy allocation policy is optimal we use this to write the expected profits and its first partials explicitly this in turn enables us to prove additional properties of the profit function and several interesting properties of the optimal solution in a limited computational study using two products we illustrate the benefits of solving for the optimal quantities when substitution is considered at the ordering stage over similar computations without considering substitution while ordering specifically we show that the benefits are higher with high demand variability low substitution cost low profit margins or low price to cost ratio high salvage values and similarity of products in terms of prices and costs

the u s evidence on optimal taxation over time abstract this paper considers a tax rule in which a uniform tax rate over time becomes optimal its implications are that 1 changes in the tax rate should arise only when there are changes in permanent government expenditures and 2 no variable other than permanent government expenditures should be of any value in predicting the tax rate these implications are tested using u s data for 1937 82 empirical results of the tests reveal that in addition to responding to permanent government expenditures the tax rate also responds to temporary defense purchases the general price level and a time trend

temporary income taxes and consumer spending both economic theory and casual empirical observation of the u s economy suggest that spending propensities from temporary tax changes are smaller than those from permanent ones but neither provides much guidance about the magnitude of this difference this paper offers new empirical estimates of this difference and finds it to be quite substantial the analysis is based on an amendment of the standard distributed lag version of the permanent income hypothesis that distinguishes temporary taxes from other income on the grounds that the former are more transitory this amendment which is broadly consistent with rational expectations leads to a nonlinear consumption function though the standard error is unavoidably large the point estimate suggests that a temporary tax change is treated as a 50 50 blend of a normal income tax change and a pure windfall over a 1 year planning horizon a temporary tax change is estimated to have only a little more than half the impact of a permanent tax change of equ

endogenous government spending and ricardian equivalence many analyses of debt policy assume exogenous government expenditures instead the author uses an optimizing model in which the government endogenously selects values of taxes spending and debt to maximize welfare if demand for publicly provided goods is elastic a debt financed tax cut increases consumption because individuals rationally expect some reduced government spending in the future even though future taxes rise they do not offset the expansionary effect of the current tax cut on consumption depending on preferences the marginal propensity to consume out of tax cuts can take any value between zero and the marginal propensity out of ordinary income copyright 1992 by royal economic society

the sustainability of government deficits implications of the present value borrowing constraint this paper introduces a new methodology for evaluating the sustainability of fiscal policy the new methodology is distinguished from most existing tests in two important respects first it allows for stochastic real interest rates and second it is both necessary and sufficient results from the application of the new test suggest that recent fiscal policy in the united states has not been sustainable the paper contrasts its findings with those of james d hamilton and marjorie a flavin 1986 copyright 1989 by ohio state university press

co integration and error correction models the temporal causality between government taxes and spending several interesting papers have recently considered whether government taxes granger cause government spending or vice versa the findings based on standard granger 6 causality tests are not consistent manage and marlow 10 conclude that when evidence of one way causality exists federal taxes granger cause federal spending while anderson wallace and warner 1 conclude that the evidence supports one way causality in the opposite direction ram 11 reexamining the issue concludes that taxes granger cause spending at the federal level but that spending granger causes taxes at the state and local level von furstenberg green and jeong 13 in another related article examine the tax and spend spend and tax causality issue using a more general vector autoregressive var model they introduce in addition to federal taxes and spending two economic variables the gnp gap and the inflation rate decompose federal spending into several categories and remove the effects of automatic stabilizers when appropriate they find little evidence that taxes granger cause spending and limited evidence that spending causes taxes a finding which corresponds most closely to that of anderson wallace and warner 1 our purpose is to reconsider the causality issue with the aid of co integration and errorcorrection modeling our analysis illustrates with a specific example how sources of causality can be neglected in standard granger causality tests moreover addressing the question of temporal causality between government taxes and spending provides insight as to how different policies might or might not help control the growth of government the results of our estimating various co integration and error correction models with quarterly data suggest bi directional causality between government taxes and spending both for the federal and state and local sectors this finding counters the conclusions of previous studies when annual data are used however our

budget deficits and national saving are politicians exogenous during the thirty five year period following world war ii the federal budget deficit averaged less than one percent of net national product never once exceeding five percent for the five year period from 1982 86 the budget deficit never once fell below five percent of net national product there have been some modest cutbacks recently and the deficit is likely to fall to about four percent of net national product in 1988 further declines are now projected in the congressional budget office 1988 baseline forecast of the implications of present policies but both 1988 presidential candidates suggested many more policies that would increase than decrease the deficit these numbers indicate that after years of relative abstinence the united states has experimented with persistent budget deficits on a rather massive scale in the 1980s economists have generally been quite critical of this fiscal policy though there are at least three respectable minority views arguing that federal deficits are not so bad and quite possibly better than likely corrective measures the rationale for economists general opposition comes from those who hold what is called the neoclassical view of deficits according to this view if the united states should be treated as a closed economy persistent deficits will raise interest rates and lower investment if the united states should be treated as a small open economy persistent deficits will leave real interest rates and investment unchanged but the drop in national saving would be financed by higher foreign borrowing accomplished through a rise in the dollar and a drop in net exports either way net national saving falls and consumption rises at the expense of some combination of investment and net exports as a result living standards are higher in the present but lower in the future compared to what they would be in a world of no deficits

treating respondent uncertainty in contingent valuation a comparison of empirical treatments this research examines the impact of uncertainty on contingent valuation responses using 1 a survey of canadian landowners about willingness to accept compensation for converting cropland to forestry and 2 a survey of swedish residents about willingness to pay for forest conservation five approaches from the literature for incorporating respondent uncertainty are used and compared to the traditional random utility model with assumed certainty the results indicate that incorporating uncertainty has the potential to increase fit but could introduce additional variance while some methods for uncertainty can be an improvement over traditional approaches it is imperative to exercise caution when making systematic judgments about the effect of uncertainty on contingent valuation responses

global potential for carbon sequestration geographical distribution country risk and policy implications abstract we have provided a framework for identifying least cost sites for afforestation and reforestation and deriving carbon sequestration cost curves at a global level in a scenario of limited information special attention is given to country risk in developing countries and the sensitivity to spatial datasets our model results suggest that within 20 years and considering a carbon price of us 50 tc tree planting activities could offset 1 year of global carbon emissions in the energy sector however if we account for country risk considerations associated with political economic and financial risks carbon sequestration is reduced by approximately 60 with respect to the geography of supply illustrated by grid scale maps we find that most least cost sites are located in regions of developing countries such as the sub sahara southeast brazil and southeast asia

incentives in principal agent relationships this article identifies some of the major issues that have been examined in the literature on incentives the article begins by discussing the frictions that lie at the heart of incentive problems next the principal s optimal response to these frictions is explored taking as given the characteristics of the agents with whom the principal interacts in a nonrepeated setting the design of individualized contracts contests and tournaments is analyzed then the principal s task of selecting the best agent is addressed and repeated agency relationships are considered

transaction costs of carbon offset projects a comparative study abstract the land use change and forestry sector can be a cost effective contributor to climate mitigation in at least three ways providing carbon offsets through carbon sequestration in biomass and soils reducing emissions of methane and other greenhouse gases and producing biofuels that replace fossil fuels the presence of carbon markets should help encourage these activities however most carbon trades to date have occurred in the energy sector a major obstacle to carbon trades from land use systems is the presence of high transaction costs of converting a carbon offset into a tradable commodity so the prevailing market carbon prices may not provide enough incentive for adoption this paper presents a model of the exchange of carbon offsets between a project developer and a group of landholders the model is solved to derive project feasibility frontiers that show the minimum number of contracts necessary to make a project feasible at any given carbon price the model is applied to two case studies smallholder agroforestry in indonesia and partial reforestation of family farms in australia under two types of contract purchase of carbon flows and rental of carbon stocks the paper concludes by identifying possible strategies to reduce transaction costs while maintaining project integrity

is the budget deficit too large yes specifically we find that recent spending and taxing policies of the government if continued violate the government s intertemporal budget constraint as a result government spending must be reduced and or tax revenues must be increased these conclusions are based on tests of whether government spending and revenue are cointegrated in addition to examining real spending and revenue we also normalize these variables by real gnp and population for a growing economy these normalized measures are perhaps more pertinent we also test and find support for the hypothesis that deficits have become a problem only in recent years

u s deficits since world war i the tax smoothing theory suggests that deficits would respond particularly to recession temporarily high government spending and anticipated inflation my empirical estimates indicate that a relation of this type is reasonably stable in the u s since at least 1916 in particular the statistical evidence does not support the idea that there has been a shift toward a fiscal policy that generates either more real public debt on average or that generates larger deficits in response to recessions further the deficits for 1982 3 and popular projections formed in 1984 for 1984 5 are consistent with the previous structure the high values of these deficits reflect the customary response to substantial recession interacting with big government and to expected inflation

the ricardian approach to budget deficits persistent budget deficits have increased economists interest in theories and evidence about fiscal policy this paper develops the ricardian approach and contrasts it with standard models the discussion considers from major theoretical objections to ricardian equivalence finite lifetimes imperfect capital markets uncertainty about future taxes and incomes and the distorting effects of taxation the paper then considers empirical evidence on interest rates consumption and saving and current account deficits the conclusion is that the ricardian approach is a useful first order approximation and that this approach will probably become the benchmark model for assessing fiscal policy this abstract was borrowed from another version of this item

are bond financed deficits inflationary a ricardian analysis this paper considers the possible theoretical validity of the following monetarist hypothesis that a constant positive government budget deficit can be maintained permanently and without inflation if it is financed by the issue of bonds rather than money the question is studied in a discrete time perfect foresight version of the competitive equilibrium model of sidrauski modified by the inclusion of government bonds as a third asset it is shown that the monetarist hypothesis is invalid if the deficit is defined exclusive of interest payments but that it is valid under the conventional definition it is also shown that the stock of bonds can grow indefinitely at a rate in excess of the rate of output growth provided that the difference is less than the rate of time preference these formal conclusions do not take account of possible limitations on taxing capacity arising from default incentives that tend to grow with the stock of bonds

on the limitations of government borrowing a framework for empiricaltesting this paper seeks to distinguish empirically between two views on the limitations of government borrowing according to one view nothing precludes the government from running a permanent budget deficit paying interest due on the growing debt load simply by issuing new debt an alternative perspective holds that creditors would be unwilling to purchase government debt unless the government made a credible commitment to balance its budget in present value terms we show that distinguishing between these possibilities is mathematically equivalent to testing whether a continuing currency inflation might be fueled by speculation alone or is instead driven solely by economic fundamentals empirical tests which have been developed for this economic question lead us to conclude that postwar u s deficits are largely consistent with the proposition that the government budget must be balanced in present value terms this abstract was borrowed from another version of this item

budget balance through revenue or spending adjustments abstract the paper provides a historical perspective on the issue of whether budget deficits are typically eliminated by increased taxes or by reduced spending by examining u s budget data from 1792 1988 i conclude that about 50 65 of all deficits due to tax cuts and about 65 70 of all deficits due to higher government spending have been eliminated by subsequent spending cuts while the remainder was eliminated by subsequent tax increases in contrast to previous studies the empirical analysis uses error correction models in a way that the intertemporal budget constraint is imposed in the estimation stage

the sustainability of current account deficits abstract this paper proposes a new method of determining whether a country is likely to be able to sustain its current account deficits without defaulting on its debt it is based on the notion of the national intertemporal budget constraint ibc which is derived from a forward solution of the balance payments identity although the problem is formally similar to that considered in the literature on the government ibc a more general solution is obtained by allowing the primary deficit to be endogenous instead of exogenous it is shown that the existence of negative feedback from net indebtedness to the primary deficit a wealth effect is sufficient this method supplants the ad hoc approach previously adopted in the current account literature whilst many of the same variables appear a formal structure for analysing them is provided

budget deficits rhetoric and reality w v t hatever the real or imagined ills of the economy the news media most politicians and a fair proportion of the economics profession are quick to point to the culprit the budget deficit no matter that few appear to know or care precisely what deficit they are talking about or how it is measured no matter that few bother to explain in terms of a relevant model just how government deficits may be expected to impact the economy no matter that few offer any empirical data to sustain their judgments so budget deficits cause inflation budget deficits raise interest rates budget deficits bring on the trade deficits budget deficits crowd out investment budget deficits are an irresponsible mortgage on the future and budget deficits caused the october 1987 stock market crash and now threaten further financial cataclysms is there truth in any of these assertions or does it all depend budget deficits do matter and their effects contrary to barro s ricardian equivalence theorem can be substantial as most economists have recognized for at least half a century budget deficits can however be too small as well as too large to know which you have to measure them right and you have to analyze their role in the world in which we live pure walrasian and rational expectation market clearing models may prove more useful for academic advancement than for promotion of economic health i need not repeat many of the objections to the equivalence theorem raised by bernheim and gramlich and addressed by barro in this symposium however there is

government deficits and aggregate demand abstract the evidence presented in this paper indicates that changes in government spending transfers and taxes can have substantial effects on aggregate demand the estimates also indicate that the promise of future social security benefits significantly reduces private saving each the basic implications of the so called ricardian equivalence theorem is contradicted by the data the results are consistent with the more general view of the effects of fiscal actions and fiscal expectations that is described in the paper

design for postponement a comprehensive characterization of its benefits under unknown demand distributions recent papers have developed analytical models to explain and quantify the benefits of delayed differentiation and quick response programs these models assume that while demands in each period are random they are independent across time and their distribution is perfectly known i e sales forecasts do not need to be updated as time progresses in this paper we characterize these benefits in more general settings where parameters of the demand distributions fail to be known with accuracy or where consecutive demands are correlated here it is necessary to revise estimates of the parameters of the demand distributions on the basis of observed demand data we analyze these systems in a bayesian framework assuming that our initial information about the parameters of the demand distributions is characterized via prior distributions we also characterize the structure of close to optimal ordering rules in these systems for a variety of types of order cost functions

optimal policy for a muti product multi period non stationary stochastic production and customization problem abstract this paper is concerned with a multi product multi period non stationary stochastic production and customization problem in which a firm wishes to satisfy multi period stochastic demands for m products the firm produces a generic product that can be customized into the m products the lead time to produce the generic product is one period the generic product can be customized into any of the m products immediately assume that the costs of production customization storage and shortage are linear also assume that the unsatisfied demands for the m products at the firm in each period are lost the objective of the firm is to find a production customization policy that minimizes the expected cost over a planning horizon we obtain the conditions that ensure that a myopic production customization policy is optimal

approximations of dynamic multilocation production and inventory problems consider a central depot or plant which supplies several locations experiencing random demands orders are placed or production is initiated periodically by the depot the order arrives after a fixed lead time and is then allocated among the several locations the depot itself does not hold inventory the allocations are finally received at the demand points after another lag unfilled demand at each location is backordered linear costs are incurred at each location for holding inventory and for backorders also costs are assessed for orders placed by the depot the object is to minimize the expected total cost of the system over a finite number of time periods this system gives rise to a dynamic program with a state space of very large dimension we show that this model can be systematically approximated by a single location inventory problem all the qualitative and quantitative results for such problems can then be applied

are stationarity and cointegration restrictions really necessary for the intertemporal budget constraint abstract time series related to fiscal and external deficits are commonly subjected to stationarity and cointegration tests to assess if the deficits are sustainable such tests are incapable of rejecting sustainability the intertemporal budget constraint proves to be satisfied if either the debt series or the revenue and with interest spending series are integrated of arbitrarily high order i e stationary after differencing arbitrarily often revenues and spending do not have to be cointegrated rejections of low order difference stationarity and of cointegration are thus consistent with the intertemporal budget constraint error correction type policy reaction functions are suggested as more promising for understanding deficit problems

fiscal reaction under endogenous structural changes in brazil abstract regarding the importance of fiscal policy in smoothing the impact of shocks such as the international financial and economic crises the paper analyzes the sustainability of the brazilian fiscal policy by taking into consideration the possibility of multiple endogenous structural breaks on the coefficients of government reaction function from monthly data in the period 1991 2008 tests on the reliable estimates dictate the occurrence of structural change in may 1994 and another in february 2003 there has been a situation of fiscal solvency in brazil but only from may 1994 the hitherto innocuous actions of government to formulate policies on public debt turn out to be significant as it rose twofold after february 2003 this reinforces the existence of a more flexible alternative to implement strategic policy in brazil if an eventual alternative for increasing public spending is a way of hindering the effects of international financial crises without compromising the fiscal targets

barriers to massachusetts forest landowner participation in carbon markets u s forests including family owned forests are important carbon sinks and sources for carbon sequestration family forest owners constitute a significant portion of the overall forestland in the u s but little is known about their preferences for participating in carbon sequestration programs the goal of this research is to understand what motivates massachusetts family forest owners to participate in carbon markets the study estimates the probability these landowners would engage in carbon sequestration programs using data from a survey of 930 massachusetts family forest owners results from a random effects ordered probit indicate that under a carbon scenario similar to the current voluntary scheme very few of these landowners would be interested in participating supply analysis indicates these landowners are more influenced to participate by factors other than price regression analysis results suggest that survey respondents are concerned about early withdrawal penalties additionality requirements and contract length forest owner harvesting plans opinions about forest usage and beliefs about climate change all play a significant role in the decision to participate the study suggests that policy makers should consider the reasons behind these low participation rates because private forest owners could play a pivotal role in the carbon sequestration potential of forests

u s federal indebtedness and the conduct of fiscal policy abstract this paper examines whether the conduct of u s fiscal policy since the 1920s has been influenced by constraints on the accumulated stock of outstanding federal debt the evidence is affirmative during most of the inter and post war period policy in effect stabilized the federal debt relative to gnp but after 1981 large debt and debt service costs failed to produce deficit reductions consistent with the pattern of previous decades

a neoclassical perspective on budget deficits i n the 1988 presidential campaign virtually every serious candidate spoke of the urgent need to trim government budget deficits public opinion polls have identified federal deficits as a key economic issue second only to unemployment while many economists are relieved by what they perceive to be a long overdue political response to a critical economic problem others regard the fuss as much ado about nothing it is indeed remarkable that economists can disagree so severely over an issue which commands such a uniform reaction from laymen of widely different ideologies and political affiliations generally speaking there are three schools of thought concerning the economic effects of budget deficits neoclassical keynesian and ricardian before proceeding further it is useful to review the basic structure and implications of each paradigm the neoclassical paradigm envisions farsighted individuals planning consumption over their own life cycles budget deficits raise total lifetime consumption by shifting taxes to subsequent generations if economic resources are fully employed increased consumption necessarily implies decreased saving interest rates must then rise to bring capital markets into balance thus persistent deficits crowd out private capital accumulation in the current economic environment most economists would agree that these consequences would be highly detrimental

fiscal sustainability and monetary versus fiscal dominance evidence from brazil 1991 2000 under a monetary dominant md regime the primary surplus adjusts to limit debt growth permitting monetary policy to be conducted independently of fiscal financing requirements in brazil some evidence favours an md regime for 1995 1997 but not for the decade of the 1990s as a whole while fiscal adjustments of 1999 yielded a primary surplus of about 3 of gdp consistent with solvency a credible md regime would require further adjustments of the primary surplus if debt increases growth falls or interest rates rise

public debt sustainability and endogenous seigniorage in brazil time series evidence from 1947 1992 abstract in this paper we investigate three central issues in public finance first was the path of public debt sustainable during 1947 1992 second how has the government balanced the budget after shocks to either revenues or expenditures were observed third are expenditures exogenous the results show that i debt is sustainable in econometric tests with the budget being balanced almost entirely through changes in taxes regardless of the cause of the initial imbalance expenditures are weakly exogenous ii the behavior of a rational brazilian consumer may be consistent with ricardian equivalence iii seigniorage revenues are critical in restoring intertemporal budget equilibrium

myopic solutions of markov decision processes and stochastic games sufficient conditions are presented for a markov decision process to have a myopic optimum and for a stochastic game to possess a myopic equilibrium point an optimum or an equilibrium point is said to be myopic if it can be deduced from an optimum or an equilibrium point of a static optimization problem or a static nash game the principal conditions are a each single period reward is the sum of terms due to the current state and action b each transition probability depends on the action taken but not on the state from which the transition occurs and c an appropriate static optimum or equilibrium point is ad infinitum repeatable these conditions are satisfied by several dynamic oligopoly models and numerous markov decision processes

fuzzy logic and preference uncertainty in non market valuation in seeking to value environmental amenities and public goods individuals often have trouble trading off the vague good or amenity against a monetary measure valuation in these circumstances can best be described as fuzzy in terms of the amenity being valued perceptions of property rights and the numbers chosen to reflect values in this paper we apply fuzzy logic to contingent valuation employing a fuzzy clustering approach for incorporating preference uncertainty obtained from a follow up certainty confidence question we develop a fuzzy random utility maximization frum framework where the perceived utility of each individual is fuzzy in the sense that an individual s utility belongs to each cluster to some degree the model is then applied to a swedish survey that elicited residents willingness to pay for enhanced forest conservation and to a canadian survey of agricultural landowners that elicited their willingness to accept compensation for a tree planting program both the wtp and wta measures we obtain using the fuzzy approach are well below those obtained using standard probability methods based on goodness of fit measures and monte carlo experimentation a case can be made for using a fuzzy preference approach for modeling preference uncertainty as opposed to incorporating respondent uncertainty within the random utility maximization framework

voting on the budget deficit this paper analyzes a model in which a group of rational individuals votes over the composition and time profile of public spending all voters agree that a balanced budget is ex ante optimal however if there is disagreement between current and future majorities a balanced budget is not a political equilibrium under majority rule under certain conditions a majority of the voters favors a budget deficit and the equilibrium deficit is larger the greater is the polarization among voters copyright 1990 by american economic association

participation in the world s first clean development mechanism forest project the role of property rights social capital and contractual rules abstract clean development mechanism cdm forest projects are perceived as an attractive way to both help mitigate climate change and transfer income to rural poor however to engender participation of small scale producers a cdm forest project must offer sufficient incentives while minimizing their costs of participation all the while respecting the need for additionality property rights social capital and contractual rules are critical in the success of cdm forest projects in this paper we ask what factors affect participation in the world s first cdm project established in guangxi province china using village level surveys we find that although the project facilitates participation through carbon pooling and a share holding system much of the project land remains unforested we find that the primary reasons for the unforested regions are constrained contractual rules property rights allocation disputes and low levels of social capital in some villages

myopic policies for some inventory models with uncertain demand distributions the majority of papers on stochastic inventory theory make the assumption that the distribution of consumer demand in each time period is known with certainty while this assumption is unsupported in many applied contexts it is conventionally held that more realistic models are more difficult to solve and will not yield simple operational policies this paper shows that a simple inventory policy based upon a critical fractile can be optimal or near optimal in some inventory models with parameter adaptive demand processes in these some parameter of the demand distribution is not known with certainty and estimates of the parameter are updated in a statistical fashion as demand is observed through time examples include exponentially smoothed forecasts and bayesian updating of parameter estimates bounds on the value loss relative to optimal cost when using the critical fractile policy can be calculated directly from the problem data some numerical examples illustrate the technique

government asset and liability management in an era of vanishing public debt the paper examines alternative options for managing public debt and public assets in a government balance sheet framework that includes the treasury the federal reserve and social security even after september 11 u s fiscal policy is on a trajectory to accumulate substantial uncommitted funds the paper examines how such funds should be invested i conclude that high quality fixed income securities are the best benchmark and that social security is the most appropriate government asset manager the analysis of policy alternatives reveals a trilemma between maintaining a liquid treasury market minimizing rent seeking and facilitating intergenerational risk sharing

the impact of kinship networks on the adoption of risk mitigating strategies in ethiopia the adoption of certain farm management practices such as tree planting and soil and water conservation can reduce exposure to weather shocks however in many countries the adoption of such risk mitigating measures is far from complete we explore how risk sharing networks in the form of kinship characterized by the moral imperative of within group sharing affects the adoption of risk mitigating activities in rural ethiopia we find suggestive evidence that compulsory sharing invites free riding and attenuates incentives for self protection against weather shocks we also find evidence of the existence of a possible substitution effect between credit and social networks

mitigating climate change by planting trees the transaction costs trap land use change and forestry projects are considered a low cost option for addressing climate change mitigation in canada afforestation is targeted to sequester enough carbon to meet one fifth of its international obligations and at lower cost than emissions reduction we examine economic aspects of the institutions and incentives needed to encourage landowners in canada to adopt tree planting on a large scale based on data from a survey of landowners the transaction costs of getting landowners to convert their land from agriculture to plantation forests appear to be a significant obstacle possibly increasing the costs of afforestation projects beyond what conventional economic analysis suggests

the tax smoothing hypothesis evidence from sweden 1952 1999 this paper tests barro s 1979 tax smoothing hypothesis using swedish central government data for the period 1952 1999 according to the tax smoothing hypothesis the government sets the budget surplus equal to expected changes in government expenditure when expenditure is expected to increase the government runs a budget surplus and when expenditure is expected to fall the government runs a budget deficit the empirical evidence suggests that the model provides a useful benchmark and that tax smoothing behavior can explain about 60 percent of the variability in the swedish central government budget surplus

public debt the unit root hypothesis and structural breaks a multi country analysis we assess fiscal performances in g7 and selected latin american and asian countries we consider two questions i have public finances been sustainable ii do countries follow more restrictive fiscal policies when debt starts to rise we find that i the traditional unit root tests often overlook the corrective actions taken by many governments controlling for structural breaks changes the non stationarity results dramatically among the three groups ii estimation of a reaction function for governments expanded by incorporating structural breaks provides further evidence for significant active anti debt policies among g7 countries and to a lesser extent in the other regions