income elasticities of exports and imports a re examination of the empirical evidence it is conclusively shown that in times of world wide economic expansionceteris paribus developing countries balance of trade accounts improve but those of developed countries deteriorate

balance of payments the harrod foreign trade multiplier and economic growth the european and north american experience 1970 85 1988 balance of payments the harrod foreign trade multiplier and economic growth the european and north american experience 1970 85 applied economics vol 20 no 12 pp 1635 1642

asymmetric information signaling and environmental taxes in oligopoly abstract this paper examines the effects of signaling on environmental taxation in a two period oligopoly model in which each firm privately knows whether its technology is clean or dirty while third parties the rival firms and the regulator have only a subjective perception about this fact consequently there are both horizontal and vertical asymmetric information and each firm can strategically manipulate both the competitor s and the regulator s priors in this context we find that each firm wishes to be perceived as a technologically clean firm in period 2 whenever the regulator s ecological conscience is sufficiently high we also show that taxes under symmetric information are always positive but under asymmetric information and signaling they may be negative subsidies and lower or greater than in the symmetric information case depending on the ecological conscience of the regulator and the probability of firms being dirty finally taxes are below environmental marginal damage both under symmetric and asymmetric information and signaling reinforces such under taxation

the harrod foreign trade multiplier and economic growth in asian countries the validity of the harrod foreign trade multiplier for 11 asian countries is tested the results obtained generally support thrilwall s specification of the multiplier this suggests in an open economy relevant economic management is the factor that manipulates the income elasticities of exports and imports

growth and the external constraint lessons from the spanish case the present article attempts to determine the role played by the balance of payments constraint on economic growth in spain 1960 94 using cointegration techniques this empirical exercise also serves to reveal some shortcomings in the usual procedures for estimating thirlwall s law in particular the spanish case reveals how important it is to introduce a variable that expresses the competitiveness gains generated by improvements in quality of the goods and services into the export function it also demonstrates the inadequate simplification entailed in an a priori exclusion of relative prices in external equilibrium equation not taking these two aspects into consideration may give rise to an erroneous confirmation of thirlwall s law especially if as in the spanish case both effects offset each other finally if the aim is to analyse long term relationships between variables it would seem advisable to use procedures such as cointegration with variables in levels

restricted redistributive taxation shadow prices and trade policy abstract this paper reports on the use of an algorithm to compute optimal policies in the areas of commodity taxation international trade and public shadow pricing for a government which is interested in redistributing income but has limited powers of taxation the algorithm is applied to selected ldc data using a highly simplified general equilibrium model some insight into the relationships between constraints on taxation and other areas of government policy is provided by analyzing models where domestic tax restrictions can make inefficient public production or tariffs on international trade desirable

balance of payments constrained growth a rejoinder to professor thirlwall professor thirlwall has argued that the growth rate of a country is constrained by the requirement that the external current account must broadly balance he maintains that a country s growth can be analysed using a dynamic harrod trade multiplier and that a country s long run growth rate y will approximate to the ratio of the rate of growth of exports x to the income elasticity of demand for imports a in a recent article in this journal mcgregor and swales 1985 doubts were expressed about the theoretical and empirical grounds on which thirlwall makes these claims in his reply thirlwall argues that such doubts are unfounded he clarifies his theory on a number of points he argues that his theory was subjected to inappropriate empirical tests and whilst accepting that equation 1 can be derived from a strict neoclassical model he invites the reader to choose between the plausibility of the neoclassical story as against the keynesian alternative

pollution taxation and strategic behaviour abstract this paper proposes a pollution tax to be imposed on the victim and the injurer to discourage strategic moves by the victim to exploit the injurer an uniformed regulator induces an optimal emission of pollution by choosing an appropriate stochastic tax

labour supply commodity demand and marginal tax reform this paper examines the implications of extending the ahmad stern model of indirect tax reform to include labour supply the inclusion of labour supply alters the basic measure of marginal revenue cost mrc of indirect taxation and introduces the possibility of calculating a mrc for direct taxation the paper derives the expressions for these revised mrcs and provides estimates from irish data it then examines the sensitivity of the results to assumptions regarding functional form and in particular goods leisure sc parability in setting optimal tax rates policy makers face considerable difficulties explicit assumptions must be made regarding the underlying preferences of the consumer i e the functional form for the utility and demand functions and also about how expenditures are distributed sensitivity to underlying preferences is discussed by deaton i 98 i and is empirically examined by ray i986 and ebrahimi and heady i988 policy makers also face the problem that even when they do provide explicit forms for demand functions they face difficulties regarding the reliability of estimates and are also evaluating demand responses at a point possibly quite far away from the optimum the difficulties outlined above led to the development of the marginal tax reform literature with the seminal paper in this area by ahmad and stern i984 this approach has the considerable advantage of not requiring the choice of explicit utility functions nor of distributions of expenditure but instead merely requiring information on the actual position of the economy at a single point in time using actual consumption and distributions of expenditure it must be noted that tax reform does require information on demand responses so that results in this area can still be sensitive to the specification of consumer preferences and demand systems however tax reform results appear to be less sensitive than do tax design results to this

from the static to the dynamic some problems in the theory of taxation abstract this paper considers problems and issues that arise when we attempt to extend the static theory of taxation and production planning to a dynamic context and to combine that theory with theories of growth the reasons dynamic theory is less developed include problems with the analytical tractability of even those dynamic models which attempt to retain the basic structure of the static model furthermore difficult and interesting issues arise in a dynamic context which are either not present or are much less severe in the static theory special attention is paid to these new issues and the difficulties they pose

thirlwall s law and balance of payments constrained growth more on the debate the various criticisms that have levelled against thirlwall s law by mcgregor and swales are examined it is shown that their arguments are untenable the relationship between the necolassical law of one price and thirlwall s law is clarified thirlwall s law is not overwhelmingly rejected by the evidence as mcgregor and swales assert their suppression of the influence of the price term on the estimates used in the test proposed by mccombie is inappropriate their regression analyis is also mid specified and a preferable specification provides no support for their conclusions they repeatedly argue that thirlwall s modele cannot account for changes in market shares and the that the estimated income elasticities of demand for exports and imports cannot capture the effects of non price competition this was shown to be erroneous by mccombie and the reasons advanced are further elaborated mcgregor and swales provide another interpretation of the relationship between thirlwll s law and the harrod foreign tr

demographic variables in demand analysis in this paper the authors discuss five procedures for incorporating demographic variables into theoretically plausible demand systems translating scaling and the gorman reverse gorman and implicit prais houthakker procedures these five procedures are used to incorporate a single demographic variable the number of children in a household into the generalized ces demand system using household budget data for the united kingdom for the period 1966 1972 excerpt

commodity taxation with administered and free market prices theory and an application to china abstract this paper analyses commodity taxes in an economy where some production is centrally planned and subject to price controls and some is market determined it shows that backward shifting of taxes can lead to significant distributional effects and demonstrates how these lead to the modification of tax rules the implications of these modifications are analysed using a numerical model based on chinese data significant non uniformity of tax rates is shown to be desirable in a case where standard tax rules imply uniformity the sensitivity of optimal taxes to concern for inequality revenue requirements and food rations are also demonstrated

static versus dynamic specifications and the harrod foreign trade multiplier the validity of the harrod foreign trade multiplier is tested using new econometric techniques the equations obtained still support the conclusions drawn from the results obtained in the past

optimally uniform commodity taxes taste differences and lump sum grants abstract optimal commodity taxes for an economy with many households should be at a uniform proportional rate under certain conditions these include i linear and parallel engel curves with intercepts dependent on household composition ii separability between goods and labour and iii optimal demogrants

a computational procedure for calculating optimal commodity taxes with illustrative evidence from indian budget data a simple procedure for calculating optimal commodity taxes is proposed which takes into account the simultaneous interdependence of taxes expenditure and price levels responses the method also allows for the social marginal utility of income to depend on prices besides expenditures in a manner implied by the assumed preference functional form illustrative calculations on indian budget data provide evidence not only in favor of the procedure but of considerable sensitivity of directions of marginal tax reforms to the data set rural or urban used and of optimal tax estimates to demand functional form copyright 1989 by the editors of the scandinavian journal of economics

the polluter pays versus the pollutee pays principle under asymmetric information abstract this paper compares the pollutee pays principle with the polluter pays principle in a model of one sided externalities and asymmetric information even allowing for mitigation through contracts pollution reductions traded for subsidies or compensations will not result in the perfect information social optimum but will bias the outcome favoring the one with the property right while the pollutee pays principle allows for global incentive mechanisms such voluntary arrangements are severely restricted for the polluter pays principle indeed these conditions for an out of court settlements low damage and large benefits from pollution somehow contradict the polluter pays principle

the efficient production of external economies does independent market adjustment always lead to a less than pareto optimal supply of goods when there are external economies the traditional pigovian conclusion that it did has recently been rejected by some eminent economists this rejection began with a contribution in this review by james buchanan and milton kafoglis who produced examples in which independent market adjustment apparently provided optimal or even supra optimal supplies of goods with external economies and thus found the orthodox pigovian conclusion unsatisfactory their finding has been accepted by many economists including william baumol who attempted in a subsequent communication in this journal to provide a formal general explanation of their result this note will show that buchanan and kafoglis failed to call attention to the major theoretical point

a structural economic dynamics approach to balance of payments constrained growth this paper derives a balance of payments equilibrium growth rate analogous to thirlwall s law from a pasinettian multi sector macrodynamic framework the resulting formula which we call the multi sectoral thirlwall s law asserts that a country s growth rate of per capita income is directly proportional to the growth rate of its exports with such a proportionality being inversely directly related to sectoral income elasticities of demand for imports exports these income elasticities are weighted by coefficients that measure the share of each sector in total imports and exports respectively it is shown that several theoretical empirical and policy implications can be drawn from such a structural economic dynamics approach to balance of payments constrained growth

industrial structure and manufacturing growth during japan s bubble and post bubble economies kobayashi n 2004 industrial structure and manufacturing growth during japan s bubble and post bubble economies reg studies 38 429 444 this paper considers the effects of changing industrial structure and region specific factors on the regional increase decrease of manufacturing shipments during the bubble and post bubble economies in japan although industrial structure affected performance during the bubble economy and was closely related to location it became less clearly linked in the 1990s specialization in materials and consumer goods industries had negative effects on growth electronics industries dramatically changed their component mix during the 1990s and regions that successfully implemented these changes enjoyed sustainable growth

economic growth the harrod foreign trade multiplier and the hicks super multiplier as we saw in chapter 2 the post keynesian view of economic growth denies that the postwar economic performance of the majority of the advanced countries has been seriously constrained by the growth of factor supplies even during the long boom of 1950 73 when the growth of output of the advanced countries in aggregate was double that of the historic norm labour shortages were never a limiting factor there was either sufficient disguised unemployment in the non manufacturing sectors or enough immigration to satisfy the demand for labour kindleberger 1967 the rate of capital accumulation is never a long run constraint on economic growth as investment is as much a result of the expansion of output as its cause kaldor 1970 the evidence in support of these conditions has been summarised in chapter 2

structural changes cointegration and the empirics of thirlwall s law thirlwall s law establishes a relation between the long run growth rate the growth of exports and the long run income elasticity of imports the estimation of this parameter requires cointegration techniques which in turn require a large span of data thus exposing the estimates to risks of structural changes while this problem has been recognized in the literature the evidence produced is still partial being concerned with a very limited number of countries and in some respects unsatisfactory in this article we fill this gap by assessing thirlwall s empirical regularity on a sample of 22 organization for economic cooperation and development oecd countries using econometric techniques that allow for the presence of a shift of unknown date in the long run parameters the results are generally supportive of thirlwall s hypothesis and allow us to reconcile and qualify the evidence provided in the existing literature

tariff design and reform in a revenue constrained economy theory and an illustration from india abstract this paper develops the theory of design and reform of protective tariffs in a revenue constrained small open economy characterized by learning by doing it shows that revenue raising requires wedges between consumer prices and shadow prices while protection when typically not achievable via subsidies directly targeted towards factor market distortions requires wedges between producer prices and shadow prices illustrative calculations in a modestly disaggregated general equilibrium model of india support the view that uniformity in protective tariffs is likely to be a reasonably good policy in situations where the government intends no discrimination within the sectors already identified for special treatment