interpreting economic time series this paper explores some of the implications for econometric practice of the principle that people s observed behavior will change when their constraints change in dynamic contexts a proper definition of people s constraints includes among them laws of motion that describe the evolution of the taxes they must pay and the prices of the goods that they buy and sell changes in agents perceptions of these laws of motion or constraints will in general produce changes in the schedules that describe the choices they make as a function of the information that they possess until very recently received dynamic econometric practice ignored this principle the practice of dynamic econometrics should be changed so that it is consistent with the principle that people s rules of choice are influenced by their constraints this is a substantial undertaking and involves major adjustments in the ways that we formulate estimate and simulate econometric models

the effective tax rate and the pretax rate of return abstract this paper presents new estimates of the taxes paid on nonfinancial corporate capital on the pretax rate of return to capital and on the effective tax rate the basic time series show that both the pretax rate of return and the effective tax rate have varied substantially in the past quarter century an explicit analysis indicates that after adjusting for different aspects of the business cycle pretax profitability was between one and 1 5 percentage points lower in the 1970s than in the 1960s the rate of profitability in the 1960s was also about one half of a percentage point greater than the profitability in the 7 years of the 1950s after the korean war changes in productivity growth in inflation in relative unit labor costs and in other variables are all associated with changes in profitability none of these variables however can explain the differences in profitability between the 1950s 1960s and 1970s looking at broad decade averages the effective tax rate and the pretax rate of return move in opposite directions lower pretax profits occuring when the tax rate is high there thus appears to have been no tendency for pretax profits to vary in a way that offsets differences in effective tax rates

how much damage will climate change do recent estimates two reasons to be concerned about climate change are its unjust distributional impact and its negative aggregate effect on economic growth and welfare although our knowledge of the impact of climate change is incomplete and uncertain economic valuation is difficult and controversial and the effect of other developments on the impacts of climate change is largely speculative the authors find that poorer countries and people are more vulnerable than are richer countries and people a modest global warming is likely to have a net negative effect on poor countries in hot climates but may have a net positive effect on rich countries in temperate climates if one counts dollars the world aggregate may be positive if one counts people the world aggregate is probably negative negative impacts would become more negative and positive impacts would turn negative for more substantial warming the marginal costs of carbon dioxide emissions are uncertain and sensitive to assumptions that partially reflect ethical positions but are unlikely to be larger than 50 per tonne carbon

capital allocation how the us compares with other major industrialized nations data for the seven major industrialized nations spanning two decades provide evidence that capital formation as a percentage of gross domestic product differs significantly among the major industrialized nations comparatively the us ranks among the leaders in residential structures and among the lowest in commercial structures however us private sector allocation of capital to machinery and equipment appears to be in line with other major trading nations the rate of capital cost recovery appears to affect the amount of capital allocated to commercial structures but not to residential structures or machinery and equipment likewise changes in the capital cost recovery provisions under the economic recovery tax act of 1981 seem to have led to an increase in capital allocated to commercial structures and to a marginal increase in capital allocated to machinery and equipment

centralized versus decentralized provision of local public goods a political economy approach abstract this paper takes a fresh look at the trade off between centralized and decentralized provision of local public goods it argues that the sharing of the costs of local public spending in a centralized system will create a conflict of interest between citizens in different jurisdictions when spending decisions are made by a legislature of locally elected representatives this conflict of interest will play out in the legislature depending on precisely how the legislature behaves the result may be excessive public spending or allocations of public goods characterized by uncertainty and misallocation across districts the extent of the conflict of interest between districts is affected by spillovers and differences in tastes for public spending thus the relative performance of centralized and decentralized systems depends upon spillovers and differences in tastes for public spending but for different reasons than suggested in the existing literature

mass car ownership in the emerging market giants the typical urban household in china owns a tv a refrigerator a washing machine and a computer but does not yet own a car in this paper we draw on data for a panel of countries and detailed household level surveys for the largest emerging markets to document a remarkably stable relationship between gdp per capita and car ownership highlighting the importance of within country income distribution factors we find that car ownership is low up to per capita incomes of about us 5000 and then takes off very rapidly several emerging markets including india and china the most populous countries in the world are currently at the stage of development when such takeoff is expected to take place we project that the number of cars will increase by 2 3 billion between 2005 and 2050 with an increase by 1 9 billion in emerging market and developing countries we outline a number of possible policy options to deal with the implications for the countries affected and the world as a whole marcos chamon paolo mauro and yohei okawa

antitrust for high technology industries assessing research joint ventures and mergers the purpose of this paper is to analyze if and how the standard methodology of antitrust analysis should be modified to reflect the importance of r and d and innovation as competitive forces and engines of economic progress focus is on such r and d intensive business combinations as research joint ventures rjvs and horizontal mergers in high technology industries the authors do not propose a complete set of guidelines for the assessment of such combinations they present an economic model of rjvs and high technology mergers that might serve as an analytical underpinning for such guidelines one conclusion of the analysis is that rjvs ought to be accorded special treatment under the antitrust laws this special treatment should entail an explicit recognition that rjvs will be scrutinized under the rule of reason according to guidelines specific to this purpose

taxes inflation and the durability of capital the choice of capital durability is affected by the rate of inflation because nominal depreciation deductions are based on historical cost rather than replacement cost this paper analyzes a model with competitive firms and demonstrates that an increase in the rate of inflation will lead to an increase in the durability of capital if the ratio of the nominal discount rate to the rate of depreciation exceeds a critical value however if this ratio is less than the crucial value this effect is reversed the effect of costs of adjustments on the crucial value is analyzed

pricing and congestion economic principles relevant to pricing roads u k expenditures on roads or road costs average l4 34 billion per year from the 24 6 million vehicles registered road taxes of l12 7 billion were collected 2 9 times road costs from 1978 88 the average daily traffic on each km of road rose by 34 percent with a consequent serious increase in congestion road space is a valuable and scarce resource and road users should logically pay the marginal social cost if they are to make efficient transport and location decisions the paper estimates these costs and the appropriate charges for britain and identifies the major policy issues total road charges ignoring hard to quantify accident costs should yield l13 8 billion of which congestion charges would be l12 8 billion though close to road taxes in total amount replacing current taxes by road pricing would reduce congestion improve public transport and avoid perverse consequences from road expansion copyright 1990 by oxford university press

distributional and efficiency impacts of increased us gasoline taxes we examine the impacts of increased us gasoline taxes in a model that links the markets for new used and scrapped vehicles and recognizes the consider able heterogeneity among households and cars household choice parameters derive from an estimation procedure that integrates individual choices for car ownership and miles traveled we find that each cent per gallon increase in the price of gasoline reduces the equilibrium gasoline consumption by about 0 2

marginal tax reform externalities and income distribution the paper examines welfare improving and revenue neutral directions marginal policy reforms for an economy with nonidentical individuals and an externality that has a feedback effect on the consumption of taxed goods it considers three types of policy instruments the indirect taxes the uniform poll transfer and public abatement this extends the framework set up by ahmad and stern 1984 bovenberg and de mooij 1994 and schob 1996 the theoretical model is illustrated for a specific externality namely congestion caused by peak car transport

environmental policy public finance and the labour market in a second best world abstract environmental and tax policies and the optimal provision of clean and dirty public goods are analysed within the context of a second best framework of optimal taxation households consume both clean and dirty commodities degradation of the natural environment occurs due to the consumption of dirty private and public goods but can be offset when the government engages in abatement activities increased environmental concern implies a higher dirt tax a lower tax on labour less employment more public abatement and a cleaner environment if the elasticity of substitution between private consumption commodities and leisure is large and that between clean and dirty goods is small public consumption may expand while private consumption contracts otherwise public consumption falls

traffic and crime abstract we study the link between crime and extreme traffic congestion to estimate the psychological costs of traffic our empirical analysis combines police incident reports with observations of local traffic data in los angeles from 2011 to 2015 this rich dataset allows us to link traffic with criminal activity at a fine spatial and temporal dimension our identification relies on deviations from normal traffic to isolate the impact of abnormally high traffic on crime we find that extreme traffic increases the incidence of domestic violence a crime shown to be affected by emotional cues but not other crimes the result is robust to a variety of specifications and falsification tests the results represent a lower bound of the psychological costs of traffic congestion since most drivers stuck in traffic do not commit domestic violence but still bear some emotional costs

r d cooperation and failures in innovation projects empirical evidence from french cis data the second french community innovation survey cis indicates that 14 of rd collaborating firms had to abandon or delay their innovation projects due to difficulties in their partnerships an outcome which we term cooperation failures controlling for sample selection on the cooperation decision our estimates show that firms collaborating with competitors and public research organizations pros especially when they are foreign are more likely to delay or stop an innovation project because of difficulties encountered in their rd partnerships more surprisingly firms collaborating with their suppliers also face a higher risk of cooperation failures at least for pros firms can reduce the risk of cooperation failures through previous experiences in partnerships larger firms and group subsidiaries are less likely to face cooperation failures and so do firms in industries with a strong appropriability regime

on the design of stable joint ventures abstract an analytical model is developed to study the problem of designing stable joint ventures aimed at jointly developing and supplying a new technology the analysis focuses on the extent to which traditional motives for joint ventures like cost sharing synergy effects or technological spillovers may shape the incentives for firms to cheat on the arrangement and hence despite larger cooperative benefits endanger the formation of a stable agreement the cheating firm although supplying the contractually specified inputs to the venture manages to keep its knowhow proprietary while benefiting from the loyal partner s know how through spillovers from the venture only if know how can be kept sufficiently proprietary within the venture will synergy effects stimulate the formation of a stable joint venture increasing the profitability of cooperation while at the same time stifling the incentives to cheat but if know how becomes difficult to appropriate synergy effects may increase the incentives to cheat resulting in no agreement at least when both parties have perfect foresight

discounting and distributional considerations in the context of global warming the economics of global warming is reviewed with special emphasis on how the cost depends on the discount rate and on how costs in poor and rich regions are aggregated into a global cost estimate both of these factors depend on the assumptions made concerning the underlying utility and welfare functions it is common to aggregate welfare gains and losses across generations and countries as if the utility of money were constant but it is not if we assume that a e co2 equivalent dlubling implies costs equal to 1 5 of the income in both high and low income countries a pure rate of time preference equal to zero and a utility function which is logarithmic in income then the marginal cost of co2 emissions is estimated at 260 590 usd ton c for a time horizon in the range 300 1000 years an estimate which is large enough to justify significant reductions of co2 emissions on purely economic grounds the estimate is approximately 50 100 times larger than the estimate made by nordhaus in his dice model and the difference is almost completely due to the choice of discount rate and the weight given to the costs in the developing world as well as a more accurate model of the carbon cycle finally the sensitivity of the marginal cost estimate with respect to several parameters is analyzed

the social cost of carbon and its policy implications the shadow price or social cost of carbon is an important indicator of the global incremental damage done by emitting greenhouse gases today cost benefit analysis would set the optimal amount of greenhouse gas emission reduction at the point where this social cost just equals the incremental cost of controlling emissions the higher the value for the social cost of carbon the more control is warranted this comparison assumes that cost benefit analysis is the correct way of determining climate change policy and many believe this is not the case because of the very long term irreversible and potentially catastrophic nature of global warming but in the short run at least a comparison of cost and benefits is required and in any event all decisions imply costs and benefits but what is the right figure for the social cost of carbon this paper reviews the uk government s assessment of the cost and concludes that it has been set far too high because of a misreading of the integrated assessment models used to balance costs and benefits moreover adoption of the uk government s shadow price would have formidable implications for energy policy in the uk and for policies on afforestation copyright 2003 oxford university press

optimal taxation of car ownership car use and public transport insights derived from a discrete choice numerical optimization model in this paper we study the taxation of car ownership car use and public transport in the presence of externalities within the framework of a discrete continuous choice model we first derive optimal taxes in a simplified setting emphasizing the specific role of fixed car ownership taxes and the relevance of public transport demand by non car owners for the optimal tax structure a numerical optimisation model is then constructed to study welfareoptimal public transport fares and two part tariffs on ownership and use of gasoline and diesel cars in belgium results are as follows first we find that the current differences in tax treatment between diesel and gasoline car ownership and use cannot be justified on the basis of external cost and budgetary considerations efficient pricing requires substantial increases in the relative user tax on diesel cars as compared to gasoline cars optimal fixed taxes are substantially below current levels and only marginally differ between car fuel types second if for political or technical reasons variable car taxes cannot be optimally adjusted large differences in fixed car taxes do result the same holds if the government uses kilometre taxes as the main variable tax instrument third the results of a series of marginal tax reform exercises suggest that a shift form gasoline towards diesel taxation is welfare improving both for fixed and variable taxes somewhat surprisingly a shift from fixed towards variable taxes is not necessarily welfare improving it is for diesel but not for gasoline cars

optimal gasoline tax in developing oil producing countries the case of mexico this paper uses the methodology of parry and small 2005 to estimate the optimal gasoline tax for a less developed oil producing country the relevance of the estimation relies on the differences between less developed countries ldcs and industrial countries we argue that lawless roads general subsidies on gasoline poor mass transportation systems older vehicle fleets and unregulated city growth make the tax rates in ldcs differ substantially from the rates in the developed world we find that the optimal gasoline tax is 1 90 per gallon at 2011 prices and show that the estimate differences are in line with the factors hypothesized in contrast to the existing literature on industrial countries we show that the relative gasoline tax incidence may be progressive in mexico and more generally in ldcs

how should heavy duty trucks be taxed abstract this paper develops and implements an analytical framework for estimating optimal taxes on the fuel use and mileage of heavy duty trucks in the united states accounting for external costs from congestion accidents pavement damage noise energy security and local and global pollution the analysis allows for endogenous fuel economy increased auto travel in response to reduced truck congestion and distinguishes driving by truck type and region we estimate the optimal second best diesel fuel tax at 1 12 per gallon and implementing it increases welfare by 1 34 billion per annum optimizing over both fuel and mileage taxes and differentiating mileage taxes by vehicle type and region yields progressively higher welfare gains the most efficient tax structure involves a diesel fuel tax of 69 cents per gallon and charges on trucks that vary between 7 and 33 cents per mile implementing this tax structure yields estimated welfare gains of 2 06 billion

second best congestion pricing the case of an untolled alternative abstract this paper deals with second best one route congestion pricing in case of an untolled alternative using a two link network simulation model the effects of various demand and cost parameters on the relative efficiency of one route tolling are analyzed it is investigated whether the existence of costs of congestion charging may be a reason for one route tolling to be more overall efficient than two route tolling finally the efficiency of revenue maximizing one route and two route tolling is discussed

does britain or the united states have the right gasoline tax this paper develops an analytical framework to assess the second best optimal level of gasoline taxation taking into account unpriced pollution congestion and accident externalities as well as interactions with the broader fiscal system we provide calculations of the optimal taxes for the us and the uk under a variety of parameter scenarios under our central parameter values the second best optimal gasoline tax is 1 01 gal for the us and 1 34 gal for the uk current tax rates are much lower than this in the us and higher in the uk the calculations are moderately sensitive to alternative parameter assumptions the congestion externality is the largest component in both nations revenue raising needs also play a significant role as do accident externalities and local air pollution potential welfare gains from reducing the current uk tax rate are estimated at nearly one fourth the production cost of all gasoline used in the uk even larger gains could be achieved by switching to a tax on vehicle miles with equal revenue yield for the us the welfare gains from optimizing the gasoline tax are smaller but those from switching to an optimal tax on vehicle miles are very large

a political economy model of road pricing abstract in this paper we use a simple majority voting model to study the introduction of urban congestion tolls the model allows for different types of uncertainty and considers different uses of the toll revenues the following results are obtained first we show that individual uncertainty with respect to modal substitution costs may imply that a majority votes against road pricing ex ante although a majority would have been in favor after its introduction ex post moreover if a majority is against road pricing ex ante there will also be no majority for organizing an experiment that would take away the individual uncertainty second political uncertainty with respect to the use of the revenues corroborates the finding that ex ante more voters will be against the introduction of tolls third both types of uncertainty suggest that fewer voters are against road pricing when toll revenues are used to subsidize public transport than when they are redistributed to all voters importantly the results of this paper are consistent with a number of recent empirical observations on efforts to introduce road pricing including the systematic rejection of road pricing in referenda the more favorable attitudes towards road pricing after than before its introduction and tying the toll revenues to support public transport

cooperation between rivals informal know how trading it has long been recognized that it is difficult for an innovating firm to fully appropriate the benefits arising from its innovations and that desired research might therefore not be performed nelson 1959 pp 297 306 one sometimes possible solution to this dilemma is cooperative r d conducted by firms who share the costs and benefits of particular r d projects johnson 1973

effective tax rates in macroeconomics cross country estimates of tax rates on factor incomes and consumption abstract this paper proposes a method for computing tax rates using national accounts and revenue statistics using this method we construct time series of tax rates for large industrial countries the method identifies the revenue raised by different taxes at the general government level and defines aggregate measures of the corresponding tax bases this method yields estimates of effective tax rates on factor incomes and consumption consistent with the tax distortions faced by a representative agent in a general equilibrium framework these tax rates compare favorably with existing estimates of marginal tax rates and highlight important international differences in tax policy

comparing the efficiency of alternative policies for reducing traffic congestion abstract this paper compares the efficiency of a single lane toll a uniform congestion tax across freeway lanes a gasoline tax and a transit fare subsidy at reducing congestion there are three conditions for an efficient outcome relating to travel across modes across peak and off peak periods and sorting out drivers with high and low time costs across faster and slower freeway lanes each policy involves some inefficiency indeed the single lane toll gasoline tax and transit subsidy forego at least two thirds of the efficiency gains under an ideal congestion tax that varies across lanes however the uniform congestion tax achieves over 90 of these gains

technology development mode a transaction cost conceptualization technology alliances have emerged in the past decade as a significant mode for the development of innovation the present research assesses the factors explaining whether firms will engage in such technology alliances or utilize the more traditional mode of internal r d the hypotheses stem from a transaction cost conceptualization results suggest that firms which pursue technology alliances are likely to have less commitment to product category specific assets to face higher technological uncertainty to be more capable at measuring innovation performance to have more successful technology alliance experiences and to compete in lower growth product categories 1998 john wiley sons ltd

household adjustment to gasoline price change an analysis using 9 years of us survey data this paper examines the dynamics and composition of household adjustment to changes in the real price of gasoline using a panel of us households by decomposing the demand for gasoline into the demand for vehicle miles traveled and the demand for household composite miles per gallon we are able to add rich detail to the description of how households respond to gasoline price changes while obtaining total price elasticity estimates well within the range found in the literature we find that consumers initially respond to a price rise with a much larger decrease in consumption than would be indicated by the total elasticity in addition households respond to price changes by adjusting vehicle miles traveled more than composite miles per gallon in the year after a price change

the theory of reform and indian indirect taxes abstract given a set of value judgements an initial state and a model of the economy one can ask whether some feasible tax change would increase welfare we do this by defining the marginal cost in terms of welfare of raising an extra rupee from the i th good the inverse optimum problem is the calculation of non negative welfare weights on households which imply that the initial state is optimum if no such welfare weights exist then a pareto improvement is possible we illustrate the concepts and results using data from the indian economy for 1979 1980 directions of tax reform for a number of specific social welfare functions and for pareto improvements are presented

economists views about parameters values and policies survey results in labor and public economics specialists in labor economics and public economics at 40 leading research universities provided opinions of policy proposals quantitative best estimates and 95 percent confidence intervals for economic parameters and answers to values questions regarding income redistribution efficiency versus equity and individual versus social responsibility their positions on policy are more closely related to their values than to their estimates of relevant economic parameters average best estimates of the economic parameters agree well with the relevant literature but individual best estimates are usually widely dispersed the individual 95 percent confidence intervals are much narrower than the substantial cross respondent variation in estimates would warrant

analysing gasoline demand elasticities a survey this paper is a survey of studies on gasoline demand although there are very many dxerent studies in this eld which sometimes appear to arrive at contradictory results we find that with proper stratification of studies by model and data type much of the contict turns to consensus in this survey we classtfy studies by data type and by ten d erent categories of model and with the exception of estimates on seasonal data which tend to be unstable and of certain inappropriate model formulations we find a fair degree of agreement concerning average short run and even long run income and price elasticities

preemptive patenting and the persistence of monopoly this article takes a different tack and inquires whether institutions such as the patent system create opportunities for firms with monopoly power to maintain their monopoly power the results apply to other situations such as brand identification spatial location and capacity expansion which share the characteristic that early or preemptive actions may lower the returns to potential competitors

optimal taxes and the structure of preferences if optimal tax theory is to be the basis for calculating tax rates a close understanding is required of the relationship between the structure of preferences and the configuration of optimal tax rates otherwise hypotheses chosen by the econometrician for practical convenience may completely determine the results independently of measurement this paper explores the relationship between various types of separability particularly weak and implicit separability and optimal tax rates in the various models discussed in the literature the use of distance functions and the antonelli matrix provides a significant unification of previously disparate results in the final analysis optimal tax theory should be the basis for actual calculation of tax rates although recently there have been great advances in theoretical results and in our understanding of their meaning we are still some way from a working knowledge of whether uniform commodity taxes are in practice optimal or if not which commodities should be discriminated against present theoretical formulae do not yield clear cut results except in special cases and it has recently become clear that optimal rates depend crucially on the detailed structure of consumer preferences for example atkinson and stiglitz 3 show that with an optimal nonlinear income tax discriminatory commodity taxes are only necessary to the extent that individual commodities are not weakly separable from leisure more recently deaton 6 has shown that a similar result holds for what is perhaps the most interesting of the standard models that where there are many consumers and only a linear income tax and proportional commodity taxes are allowed in this case separability between goods and leisure together with linear engel curves for goods removes the need for differential commodity taxation in consequence nothing can be learned about commodity taxes from consumer demand studies in which commodity demands are explained conditionally on total expenditure and commodity prices and which assume linear engel curves all such studies require separability from leisure as a maintained hypothesis and so are consistent with uniform commodity taxation these results suggest that the prospects for meaningful empirical calculations of tax rates are bleak econometricians estimating commodity demand and labor supply equations make generous use of separability assumptions to enable estimation at all in consequence it is likely that empirically calculated tax rates based on econometric estimates of parameters will be determined in structure not by the measurements actually made but by arbitrary untested and even unconscious hypotheses chosen by the econometrician for practical convenience to remedy this situation and as a prelude to fruitful empirical work it is necessary to have a more explicit understanding of how preference structure affects optimal tax rates such is the object of this paper three different

optimal environmental taxation in the presence of other taxes general equilibrium analyses this paper examines the optimal setting of environmental taxes in economies where other distortionary taxes are present we employ analytical and numerical models to explore the degree to which in a second best economy optimal environmental tax rates differ from the rates implied by the pigovian principle according to which the optimal tax rate equals the marginal environmental damages both models indicate contrary to what several analysts have suggested that the optimal tax rate on emissions of a given pollutant is generally less than the rate supported by the pigovian principle moreover the optimal rate is lower the larger are the distortions posed by ordinary taxes numerical results indicate that previous studies may have seriously overstated the size of the optimal carbon tax by disregarding pre existing taxes this abstract was borrowed from another version of this item

congestion and tax competition in a parallel network the purpose of this paper is to study the effects of tolling road use on a parallel road network where each link can be tolled by a different government using both theoreticaland numericalmo dels the paper analyses the potential tax competition between countries that each maximise the surplus of local users plus tax revenues in controlling local and transit transport three types of tolling systems are considered i toll discrimination between local traffic and transit ii only uniform tolls on local and transit transport are acceptable iii tolls on local users only the results suggest that the welfare effects of introducing transit tolls are large but that differentiation of tolls between local and transit transport as compared to uniform tolls does not yield large welfare differences also the welfare effects of toll cooperation between countries are relatively small in comparison with the welfare gains of non cooperative tolling of transit the numerical model further illustrates the effects of different transit shares and explicitly considers the role of asymmetries between countries higher transit shares strongly raise the transit toll and slightly decrease local tolls with asymmetric demands the welfare gains of introducing differentiated tolling rise strongly for the country with lower local demand

complementary resources and cooperative research a model of research joint ventures among competitors we present a model of research joint ventures in which if firms have highly complementary skills and resources then they prefer to cooperate in areas where the technology is highly appropriable as in applied research the model also indicates that large firms have a greater incentive to cooperate because they are better positioned to capture the benefits of a research venture these findings seem to explain why cooperative research among rival firms in japan has been applied rather than basic and conducted frequently among large companies but firms prefer as small a partner as possible to limit the sharing of research results creating a tension that may make cooperative efforts among rivals difficult to manage for this reason cooperation with organizations such as universities or nonprofit institutions may be a viable alternative for firms looking for complementary skills and resources

inter firm complementarities in r d a re examination of the relative performance of joint ventures we compare duopoly outcomes between two alternative modes of research and development rd the reverse holds for high spillovers when rjvs yield higher technological improvement they also yield higher industry profit and social welfare

firms motivations for cooperative r d an empirical analysis of spanish firms abstract the aim of this paper is to analyze the motives that have caused industrial firms to cooperate in r d there are many theoretical works devoted to the theme but few empirical studies have been carried out with large samples to analyze the factors which determine why firms cooperate in r d we first review the reasons offered by the literature to explain technological cooperation with this allowing us to determine the conceptual framework and to propose some hypotheses we test these hypotheses with a sample of 1652 spanish firms that have carried out r d activities the results obtained suggest that firms motivations for cooperative r d are the complexity of technology and the fact that innovation is costly and uncertain we find that in order to undertake cooperative r d it is necessary to have certain internal capacities in this area with our results being supported by the theory of absorptive capacity however and by contrast with the results presented in other works questions related to market access and search for opportunities do not appear to exert an influence over cooperative r d besides the large sized firms resort more to cooperation and the reasons for cooperative r d differ as between large and small sized firms

traffic externalities in cities the economics of speed bumps low emission zones and city bypasses abstract this paper considers various policy measures that governments can use to reduce traffic externalities in cities unlike much of the available literature that emphasized congestion we focus on measures that reduce pollution noise and some accident risks these measures include noise barriers speed bumps traffic lights tolls emission standards low emission zones and bypass capacity to guide traffic around the city center using a simple model that distinguishes local and through traffic we study the optimal use of these instruments by an urban government that cares for the welfare of its residents and we compare the results with those preferred by a federal authority that also takes into account the welfare of road users from outside the city our results include the following first compared to the federal social optimum we show that the city government will over invest in externality reducing infrastructure whenever this infrastructure increases the generalized cost of through traffic we can therefore expect an excessive number of speed bumps and traffic lights but the right investment in noise barriers second when implementing low emission zones the urban government will set both the fee for non compliance and the emission standard at a more stringent level than the federal government moreover at sufficiently high levels of through traffic the urban government will prefer imposing a toll instead of implementing a low emission zone third whatever the tolling instruments in place the city will always underinvest in bypass capacity finally if it can toll all roads but is forced to invest all bypass toll revenue in the bypass it will never invest in bypass capacity although the paper focuses on non congestion externalities most insights also hold in the presence of congestion

environmental tax interactions when pollution affects health or productivity abstract recent studies indicate that interactions with the tax distorted labor market increase the cost of pollution regulation however these studies make restrictive assumptions regarding preferences and ignore key links between pollution human health and labor productivity together these assumptions imply that pollution does not affect labor supply this paper develops an analytical general equilibrium model that considers several potential benefits from reduced pollution including improved health or productivity it shows that these benefits affect labor supply and thus create a benefit side tax interaction effect that can be of the same magnitude as the familiar cost side interaction when reduced pollution boosts labor productivity the effect substantially magnifies such benefits in contrast when pollution affects consumer health the effect tends to diminish the benefits of reduced pollution the paper considers only environmental regulation but these concepts apply equally to other policies affecting productivity or health such as research subsidies or occupational safety regulations

learning dynamics in research alliances a panel data analysis the aim of this paper is to empirically test the determinants of research joint ventures rjvs group dynamics we develop a model based on learning and transaction cost theories which represent the benefits and costs of rjv participation respectively according to our framework firms at each period in time weigh the benefits against the costs of being an rjv member rjv dynamics can then be interpreted as a consequence of this evolving trade off over time we look at entry turbulence and exit in rjvs that have been set up under the us national cooperative research act which allows for certain antitrust exemptions in order to stimulate firms to co operate in r d accounting for unobserved project characteristics and controlling for inter rjv interactions and industry effects the tobit panel regressions show the importance of group and time features for an rjvs evolution we further identify an average rjvs long term equilibrium size and assess its determining factors ours is a first attempt to produce robust stylized facts about co operational short and long term dynamics a neglected dimension in research co operations but an important element in understanding how collaborative learning works

toward an optimal u s ethanol fuel subsidy abstract enhanced environmental quality fuel security and economic development along with reduced prices of ethanol gasoline blends are often used as justifications for the u s federal excise tax exemption on ethanol fuels however the possible effect of increased overall consumption of fuel in response to lower total price mitigating the environmental and fuel security benefits are generally not considered taking this price response into account the optimal u s ethanol subsidy is derived estimated values of the optimal subsidy reveal that the subsidy s environmental and security benefits are questionable however positive environmental and security benefits from the ethanol tax exemption subsidy may be obtained if the subsidy is combined with an increase in the excise tax on gasoline

practical implications of game theoretic models of r and d the purpose of this paper is to survey recent game theoretic models of research and development and to ask whether they yield practical implications or testable hypotheses the papers i will be discussing have been written or published within the past five years they have a good deal in common relying upon similar assumptions and building upon each other because of this the literature surveyed here may seem narrow and some relevant work has probably been inadvertently omitted i apologize for these omissions for want of space i will not discuss the normative conclusions of this literature

comparing alternative policies to reduce traffic accidents abstract this paper derives and implements formulas for the welfare effects of uniform mileage taxes gasoline taxes per mile insurance premiums and mileage taxes differentiated across vehicle and driver groups for reducing the external costs of passenger vehicle accidents the average external accident cost is estimated at 2 2 6 6 cents per mile accidents costs differ substantially across driver groups but only moderately across vehicles groups annual welfare gains from a mileage tax equal to marginal external costs for each driver vehicle group are 9 4 billion in the benchmark case the uniform mileage tax and per mile insurance reform can achieve 76 and 65 of this welfare gain respectively while the gasoline tax can achieve only 28 of the welfare gain unlike other policies the gasoline tax induces costly improvements in average fleet fuel economy that have little effect on reducing external costs

automobile externalities and policies this paper discusses the nature and magnitude of externalities associated with automobile use including local and global pollution oil dependence traffic congestion and traffic accidents it then discusses current federal policies affecting these externalities including fuel taxes fuel economy and emissions standards and alternative fuel policies summarizing insofar as possible the welfare effects of those policies finally we discuss emerging pricing policies including congestion tolls and insurance reform and summarize the appropriate combination of policies to address automobile externalities

tax policy and investment in major u s macroeconomic econometric models abstract in an analysis of six major u s quarterly models the predicted results of tax incentives for investment are found to vary widely differences are traced to critical specifications in investment equations when appropriately revised investment equations are reestimated the role of tax parameters is much reduced particularly among the high outliers and the variance among the models is narrowed decidedly full model simulations of revised equations suggest that current and proposed incentives such as the investment tax credit and accelerated depreciation are not cost effective increases in investment approximate only half of static tax losses and budget deficits widen

revenue recycling and the welfare effects of road pricing the authors explore the interaction between taxes on work related traffic congestion and preexisting distortionary taxes in the labor market a congestion tax raises the overall costs of commuting to work and discourages labor force participation at the margin when revenues are returned in lump sum transfers the resulting efficiency loss in the labor market can be larger that the pigouvian efficiency gains from internalizing the congestion externality by contrast if congestion tax revenues are used to reduce labor taxes the net impact on the labor supply is positive and the efficiency gain in the labor market can raise the overall welfare gains of the congestion tax by as much as 100 percent recycling congestion tax revenues in public transit subsidies produces a positive but smaller impact on the labor supply in short the authors results indicate that the presence of preexisting tax distortions and the form of revenue recycling can crucially affect the size and possibly even the sign of the welfare effect of road pricing schemes the efficiency gains from recycling congestion tax revenues in other tax reductions can amount to several times the pigouvian welfare gains from congestion reduction

revenue raising vs other approaches to environmental protection the critical significance of pre existing tax distortions using analytical and numerical general equilibrium models we show that preexisting factor taxes produce a tax interaction effect that increases the costs of pollution taxes and quotas under policies that raise revenue and recycle it through cuts in marginal factor tax rates this effect is partially offset by a revenue recycling effect grandfathered pollution quotas such as those used under the 1990 clean air act amendments to regulate electric utilities so2 emissions do not benefit from this offset preexisting taxes raise this regulation s cost by over 70 more than half of this additional cost could be avoided by auctioning quotas and exploiting the revenue recycling effect