tax policy asset prices and growth a general equilibrium analysis abstract this paper presents a computable general equilibrium tax policy model that combines a consideration of disaggregate industry effects with an integrated treatment of short and long run adjustments to policy initiatives the model s explicit consideration of forward looking investment decisions and adjustment dynamics permits assessments of short run effects of tax policy on asset values as well as long term impacts on capital accumulation simulations reveal that effects on asset values and investment depend critically on whether policies are oriented toward new or old capital investment tax credits yield significant increases in investment without conferring windfall gains to corporate shareholders corporate tax cuts with the same revenue cost on the other hand yield large windfalls to shareholders while providing only a modest investment stimulus incidence and growth effects differ considerably across sectors particularly between business and housing

taxes housing and capital accumulation in a two sector growing economy abstract it is sometimes argued that the favorable tax treatment afforded to housing may lead to an oversupply of housing at the expense of capital this issue is examined in the context of a growing two sector economy in the basic model where the rate of time preference is constant and labor is instantaneously sectorally mobile the long run response of the capital stock to a tax on housing depends upon the relative capital intensities of the two sectors while the long run relative asset price of housing remains unchanged the robustness of these propositions to changes in the model are considered taxes on capital are also analyzed

labour tax reform employment and intergenerational distribution a simulation model of an open economy with a unionized labour market is set up to analyze the effects of a labour tax reform which combines cuts in marginal tax rates with measures to broaden the tax base we find that such a reform will be contractionary and welfare reducing if unions set wage rates with the purpose of maximizing the after tax income of their members by contrast if unions also allow for the disutility of work of their members the reform will stimulate employment increase the welfare of all generations and redistribute welfare in favour of future generations

external shocks adjustment policies and investment in a developing economy illustrations from a forward looking cge model of the philippines abstract the rapid increase in investment and external debt of middle income countries like the philippines during the 1970s was perfectly rational given existing policies however these countries could have done better with an appropriate mix of adjustment policies using a dynamic general equilibrium framework the paper examines the sensitivity of investment and growth to external shocks and adjustment policies it highlights the intertemporal trade offs of tariff reform a policy often recommended in the 1980s emphasizing the need for complementary measures to ease macro imbalances and short term dislocations of the protected sector

tax reform and u s economic growth in this paper we evaluate the impact of the tax reform act of 1986 on u s economic growth we first calculate effective tax rates on income from capital employed in corporate noncorporate and household sectors we then project the future growth of the u s economy with and without the 1986 tax reform we find that much of the potential gain in welfare was dissipated through failure to index the income tax base for inflation the most promising avenue for future reform is to include income from household assets in the tax base while reducing tax rates on business income

life and work of john richard nicholas stone 1913 1991 sir richard stone knighted in 1978 and nobel laureate in economics in 1984 was one of the pioneering architects of national income and social accounts and one of the few economists of his generation to have faced the challenge of economics as a science by combining theory and measurement within a cohesive framework he was awarded the nobel prize in economics for his fundamental contributions to the development of national accounts but made equally significant contributions to the empirical analysis of consumer behaviour his work on the growth project was also instrumental in the development of appropriate econometric methodology for the construction and the analysis of large disaggregated macroeconometric models this paper provides an analysis of stone s many contributions

applied general equilibrium models of taxation and international trade an introduction and survey we wish to acknowledge the help of three referees and of john pencavel on several earlier drafts as well as the assistance of the modelers whose work is referred to in the paper they corrected our lack of understanding of their work and provided many other helpful comments excellent research and bibliographical assistance have been provided by debbie fretz radwan shaban and janet stotsky helpful comments have been made by charles ballard michael boskin lans bovenberg sylvester damus harvey galper glenn harrison gordon lenjosek jack mutti serena ng t n srinivasan charles stuart and eric toder the authors also acknowledgefinancial support from the national bureau of economic research the national science foundation international business machines and the social sciences and humanities research council ottawa canada

on tax reform systems of business and personal taxation in most western economies are not efficient the paper discusses efficiency losses due to 1 tariffs and sales taxes 2 the nonneutral treatment of business durable inputs 3 differential rates of business income taxation and 4 the taxation of interest estimates of the possible magnitudes of the various efficiency losses are derived the second part of the paper outlines the elements of an efficient system of taxation a feature of the proposed system is that most workers would not have to file tax returns

a computational analysis of japan s generalized system of preferences abstract in this paper we employ a general equilibrium computational model of world trade to evaluate the generalized system of preferences gsp of japan we conclude that the japanese gsp is strongly trade creating because preferential treatment is offered primarily on products for which japan is a major world exporter however tariff concessions result in a deterioration in japan s terms of trade which lowers welfare in japan and improves the welfare of japan s major trading partners among the ldcs the gain from preferential treatment accrues primarily to the asian nics hong kong south korea singapore and taiwan

the inherent dangers of using computable general equilibrium models as a single integrated modelling framework for sustainability impact assessment a critical note on bohringer and loschel 2006 the search for methods of assessment that best evaluate and integrate the trade offs and interactions between the economic environmental and social components of development has been receiving a new impetus due to the requirement that sustainability concerns be incorporated into the policy formulation process a paper forthcoming in ecological economics bohringer c loschel a in press computable general equilibrium models for sustainability impact assessment status quo and prospects ecological economics claims that computable general equilibrium cge models may potentially represent the much needed back bone tool to carry out reliable integrated quantitative sustainability impact assessments sias while acknowledging the usefulness of cge models for some dimensions of sia this commentary questions the legitimacy of employing this particular economic modelling tool as a single integrating modelling framework for a comprehensive evaluation of the multi dimensional dynamic and complex interactions between policy and sustainability it discusses several inherent dangers associated with the advocated prospects for the cge modelling approach to contribute to comprehensive and reliable sustainability impact assessments the paper warns that this reductionist viewpoint may seriously infringe upon the basic values underpinning the sia process namely a transparent heterogeneous balanced inter disciplinary consultative and participatory take to policy evaluation and building of the evidence base

budget balancing incentive mechanisms abstract a p xepapadeas j environ econom management20 113 26 1991 developed a pollution abatement incentive mechanism that both reduces the information requirements of a regulator and is budget balancing drawing only on the social gains from pollution abatement to encourage firm compliance this paper demonstrates that contrary to xepapadeas the budget balancing system of random penalties cannot be used to induce compliance with the regulator s objectives if firms are risk neutral however the mechanism can be successfully applied if firms are sufficiently risk averse e rasmusen rand j econom 18 428 435 1987

developing countries and the gains from regionalism links between trade and farm policy reforms in mexico we use a multi country computable general equilibrium cge model with agricultural policy details to simulate the effects of north american free trade agreement nafta we find that mexico gains from nafta only when it also removes domestic distortions in agriculture in that case agriculture can generate allocative efficiency gains large enough to offset the terms of trade losses that arise because mexico has higher initial tariffs than its nafta partners when an rta forces a developing country to reform its domestic distortions that are linked to trade restrictions it becomes a building block toward multilateralism

incentive based policy design for pollution control and biodiversity conservation a review this paper provides a succinct review of the main developments in the literature on incentive based policy mechanisms in the contexts of pollution control and biodiversity conservation dating from the early beginnings of the science in the 1960s a focal point in the review is on the design features of these policy mechanisms key developments in policy design were originally established in controlling externalities arising from pollution and have since been extended to policy design tailored towards biodiversity conservation special emphasis is given to the spatial characteristics of the environmental problems underlying both pollution control and biodiversity conservation the paper concludes by drawing some lessons and setting out elements of a future research agenda in both policy domains

on the use of ecological prices and system wide indicators derived therefrom to quantify man s impact on the ecosystem abstract ecological prices and other system wide quantitative descriptors of ecosystem functioning are derived from the assumption that ecosystems allocate available resources efficiently among their components however ecological prices are not efficiency prices only and using them does not require one to assume that the ecosystem is completely controlled by man the same prices balance flows of different biomasses in a multicomponent system as such they play the role of exchange prices in a decentralized ecosystem properly defined with the help of ecological prices the resulting ecosystem productivity is no less a significant indicator of ecosystem functioning than the national product is significant for assessing the functioning of an economy considerations of the values taken simultaneously by our proposed indicators and by their economic analogs are of much help in judging the desirability of projects with relatively mild environmental repercussions these values are obtained from an integrated model of a system in which ecological and economic activities are intertwined however for the indicators to have an analytical meaning the methodology should be applied to trace only those dynamic paths during which the system possesses unique state dependent intensive properties in other cases a more comprehensive methodology one which also pays due regard to the viability of the ecosystem must supplement the analytical approach this rather comprehensive methodology is scale dependent and probabilistic in nature while delineating relations between the structure of the system and its behavior this method implies that efficiency and viability are two complementary rather than two commensurate attributes of a single entity an outside observer may be guided by his own values in his attempts to weigh these features but no inherent property of the system exists that supports his values unequivocally nevertheless this paper proposes an approximation to overcome this difficulty and to estimate a quantitative limit to the rate of substitution between productivity and viability such a limit is also an intensive property of the simulated system and the estimation of its value is shown to be crucial for studying the vulnerability of real ecosystems to severe man made disturbances

stepping stones for biological invasion a bioeconomic model of transferable risk we investigate three sources of bias in valuation methods for ecosystem risk failure to consider substitution possibilities between goods failure to consider nonseparability of ecosystem services with market goods and failure to consider substitution possibilities between ecosystems the first two biases are known in the literature and we offer insight on the size of the bias for a specific example our work on spatially transferable risk is novel we develop the concept and show how it may undermine typical invasion prevention strategies we find three key results first partial equilibrium estimates of welfare loss are significantly overestimated relative to general equilibrium estimates if ecosystem services and market goods are substitutes the partial equilibrium bias is greater than if they are compliments second well intended policies do not necessarily reduce overall risk risk reduction actions can transfer risk to another time or location or both which may increase total risk third policies of quotas and inspections have to be extreme to improve welfare with inspections having advantages over quotas

rents and the cost and optimal design of commodity taxes this paper numerically investigates the significance of rents for both the welfare costs and the optimal design of commodity taxes using a general equilibrium model calibrated to 1986 canadian data in the data we use ricardian rents are concentrated in agriculture and utilities with market structure rents concentrated in manufacturing different types of rents have different implications for the welfare cost of taxes and hence also for appropriate tax design ricardian rents lower the cost of taxes rents supported by imperfect competition with no free entry raise the cost of taxes rents supported by regulation generate rent seeking costs and if taxed improve resource allocation model results show a markedly nonuniform optimal tax structure and a substantial influence of the treatment of rents on the pattern of optimal tax rates by commodity

transaction costs communication and spatial coordination in payment for ecosystem services schemes agricultural producer participation and spatial coordination of land use decisions are key components for enhancing the effective delivery of ecosystem services from private land however inducing participation in payment for ecosystem services schemes for coordinating land management choices is challenging from a policy design perspective owing to transaction costs associated with participation this paper employs a laboratory experiment to investigate the impact of such costs on participation and land use in the context of an agglomeration bonus ab scheme the ab creates a coordination game with multiple nash equilibria related to alternative spatially coordinated land use patterns the experiment varies transaction costs between two levels high and low which affects the risks and payoffs of coordinating on the different equilibria additionally an option to communicate is implemented between neighbors arranged on a local network to facilitate spatial coordination results indicate a significant difference in participation and performance under high and low transaction costs with lower uptake and performance when transaction costs are high these effects are however impacted by transaction costs faced in the past communication improves both ab participation rates and performance with the effect being greater for participants facing high transaction costs

an experimental examination of general equilibrium tax incidence abstract tax incidence is examined in an experimental general equilibrium production micro economy consistent with predictions the imposition of a tax on corporate capital resulted in a flow of capital out of the corporate sector decreased corporate usage of capital relative to labor and tax shifting through decreases in the relative prices of capital and non corporate output although capital owners were able to shift some of the tax burden the corporate tax resulted in a 35 drop in capital owner s share of payoffs implications for policy are discussed

on the possibility of an inverse relationship between tax rates and government revenues abstract when arthur laffer and other supply side advocates plot total tax revenue as a function of a particular tax rate they draw an upward sloping segment called the normal range followed by a downward sloping segment called the prohibitive range a brief literature review indicates that tax rates on the prohibitive range in theoretical and empirical models have been the result of particularly high tax rates high elasticity parameters or both the labor tax rate which maximizes total revenue for example will depend on the assumed labor supply elasticity this paper introduces a new curve which summarizes the tax rate and elasticity combinations that result in maximum revenues separating the normal area from the prohibitive area a general purpose empirical u s general equilibrium model is used to plot the laffer curve for several elasticities and to plot the newly introduced curve using the labor tax example results indicate that the u s could conceivably be operating in the prohibitive area but that the tax wedge or labor supply elasticity would have to be much higher than most estimates would suggest

saving behavior in retirement when life horizon is uncertain abstract we try to explain some recent empirical observations that retired people continue to save in retirement for several years a behavior which seems to contradict the life cycle hypothesis we show that such a behavior is consistent if individuals become more optimistic about their life probability distribution or if individuals become more risk averse as they age

transition losses of partially mobile industry specific capital in estimating the economic effects of public policy comparative static models typically assume homogenous factors that are either mobile or immobile for changes designed to improve factor allocations the former assumption would overstate welfare gains while the latter would understate them the model in this paper restricts each industry s capital reduction to its rate of depreciation the stock of depreciated capital represents an industry specific type of capital that may earn a lower equilibrium return this model suggests that previous estimates of efficiency gains from integration of u s personal and corporate income taxes are overstated by 5 billion

self selecting agri environmental policieswith an application to the don watershed we consider a model of regulation for nonpoint source water pollution through non linear taxation subsidization of agricultural production farmers are heterogenous along two dimensions their ability to transform inputs into final production and the available area they possess asymmetric information and participation of farmers to the regulation scheme put constraints on the optimal policy that we characterize we show that a positive relationship between size of land and ability may exacerbate adverse selection effects we calibrate the model using data on a french watershed and we simulate the optimal second best policy and characterize the allocation of the abatement effort among the producers

performance of the ambient tax does the nature of the damage matter the ambient tax is often considered as an efficient instrument to achieve a first best outcome of ambient pollution when the regulator cannot observe individual emissions or when monitoring costs are prohibitive while this view is supported to a large extent by experimental findings there remains several hurdles that hinder the implementation of the ambient tax in the field one of these hurdles is the nature of the damage experimental findings suggest that the efficiency of the ambient tax is higher under external damage i e if ambient pollution affects non polluters spraggon in j public econ 84 427 456 2002 than under internal damage i e if ambient pollution affects polluters themselves cochard et al in environ resour econ 30 393 422 2005 but this result rests on very different experimental settings therefore we designed a new experiment that allows to compare external and internal damage within a common setting our main finding is that the ambient tax is equally efficient under internal and external damage

general equilibrium analysis of black and white markets a computational approach abstract this paper explores the inter relationship between black and white markets and presents a formulation in which equilibrium conditions hold separately for each type of market for each product with linking conditions across market types using a traditional goods and factor general equilibrium model the simultaneous operation of price controls on white markets and surveillance with penalties for those caught trading on black markets is modelled a numerical example of such an economy is presented using data for india and equilibria under coexistence are reported

reforming indirect taxes in canada some general equilibrium estimates the current indirect tax system in canada distorts economic activity in a variety of ways and has been the subject of considerable discussion as part of overall tax reform in this paper a general equilibrium model is used to analyze various changes in indirect taxes in canada focusing on possible changes to the federal and provincial sales taxes results suggest that replacing either the federal or provincial sales taxes with a broadly based sales tax yields a small but significant welfare gain the distributional effects from these changes are slightly regressive but appear to be quite small and easily offset by modest income tax credits targeted to low income households results also suggest that a broad based sales tax would be a significantly more efficient revenue source should additional sales tax revenues be required

how to measure labour market effects of immigration a review abstract this paper surveys available empirical evidence on labour market effects of immigration many different approaches have been used already to try to find out whether immigration hurts the labour market opportunities of natives no doubt new approaches will follow in the future as globalization will keep the migration issue on the agenda this literature review discusses the different approaches concentrating on both the methodology and the results at the end it tries to summarize available evidence

thermodynamics and process analysis for future economic scenarios economists are increasingly interested in forecasting future costs and benefits of policies for dealing with materials energy fluxes polluting emissions and environmental impacts on various scales from sectoral to global computable general equilibrium cge models are currently popular because they project demand and industrial structure into the future along an equilibrium path but they are applicable only to the extent that structural changes occur in or near equilibrium independent of radical technological or social change the alternative tool for analyzing economic implications of scenario assumptions is to use leontief type input output i o models i o models are unable to endogenize structural shifts changing i o coefficients however this can be a virtue when considering radical rather than incremental shifts postulated i o tables can be used independently to check the internal consistency of scenarios or i o models can be used to generate scenarios by linking them to econometric macro drivers which can in principle be cge models explicit process analysis can be integrated in principle with i o models this hybrid scheme provides a natural means of satisfying physical constraints especially the first and second laws of thermodynamics this is important to avoid constructing scenarios based on physically impossible processes process analysis is really the only available tool for constructing physically plausible alternative future i o tables and generating materials energy and waste emissions coefficients explicit process analysis also helps avoid several problems characteristic of pure cge or i o models viz 1 aggregation errors 2 inability to handle arbitrary combinations of co product and co input relationships and 3 inability to reflect certain non linearities such as internal feedback loops

the impacts of tax reform on agricultural households estimates of tax reform s impacts usually concentrate on macroeconomic impacts but attention at the industry or sectoral level is often limited our study uses a computable general equilibrium cge model to estimate the disaggregated impacts of the tax cuts and jobs act tcja of 2018 which lowered personal and corporate tax rates focusing on agriculture we use survey data to calculate how the tcja would change the tax rates faced by farmers at the sector level we use internal revenue service data to calculate tax rates for all other producers we then simulate the economy wide and sectoral effects of tcja we find that the tcja would cause a reduction in agricultural output as resources would be reallocated to other sectors using our survey data we extend the cge results to measure the impacts to farm households from changes in on and off farm income we find that most farm households would have income gains from tax reform our tax reform scenario highlights the fact that investment weighs heavily on model results that is firms that are attractive to domestic and foreign investment have gains in demand for their products while other sectors such as primary agriculture experience decreases in production a sensitivity analysis that reduces the attractiveness of the united states in foreign investment shows smaller impacts of tcja especially for macroeconomic variables

approaches to efficient capital taxation leveling the playing field vs living by the golden rule this paper analyzes intersectoral and intertemporal efficiency effects of the tax reform act of 1986 using a general equilibrium model that considers impacts of taxes on the allocation of capital across industries assets sectors and time the model pays close attentiona to capital adjustment dynamics we find that the 1986 reform worsened the intertemporal efficiency of resource allocation by increasing marginal effective tax rates on various uses and types of capital this negative efficiency effect is more that offset however by postivie effects from an improved intersectoral allocation of capital and a reduction of labor market distortions

administrative costs and instrument choice for stochastic non point source pollutants this paper extends the empiricalanalysis of non point source pollution to thecase where the pollutant is stochastic andalternative regulatory instruments havedifferent administrative costs it also appliesa method of stochastic programming whereemissions are log normally distributed forthe kennet catchment in south west england werank a range of policies in terms of abatementcosts alone and total costs abatement andadministrative costs on the basis ofabatement costs alone a uniform emission taxis the cost minimising policy but on the basisof total cost a nitrogen input tax is theleast cost policy furthermore the policyranking based on total costs changes as thereliability standard increases

capital income taxation in growing open economies abstract this paper studies how alternative capital mobility assumptions affect the incidence and efficiency of capital income taxation the study uses a two country intertemporal equilibrium model in which imperfectly elastic investment captures the notion of imperfectly mobile physical capital if home goods and foreign goods are perfect substitutes and investment is inelastic the tax effects in open and closed economies are similar only if physical capital is perfectly mobile are capital income taxes completely shifted in small open economies only then and if significant terms of trade effects are absent do open economy efficiency losses substantially exceed the closed economy losses

carbon pricing and energy efficiency improvement why to miss the interaction for developing economies an illustrative cge based application to the pakistan case abstract carbon energy taxes and energy efficiency improvement are studied well in the recent years for their potential adverse impacts on economy especially for lost production and international competitiveness and rebound effects however little attention has been paid to investigate them jointly which can not only prevent fall of energy services cost and thereby rebound effect but reduce the associated macroeconomic costs this study thus employs a 20 sector cge model to explore separately the impacts of carbon tax and its coordinated implementation with energy efficiency improvement on the pakistan economy the country underwent enormous pressure of energy security issues as well as climate change fallouts in the last couple of years and can be regarded as a suitable candidate for energy environmental conservation policies to be considered at a broader context with more concrete efforts the simulation results show that the impact of carbon tax on gdp is negative but resulting reductions in pollutant emissions are relatively high moreover the gdp is expected to grow comparatively positive when analyzed with improvements in energy efficiency with even higher decline in energy consumption demand and so emissions this simultaneous economic and environmental improvement would thus have positive implications regarding sustainable development of the country

on reforming the welfare system abstract using a simulation model for a small open economy quebec 1986 various negative income tax nit and workfare schemes are compared from the point of view of efficiency and equity the main finding is that there exist workfare schemes that are superior both to the quebec regime of 1986 and to a nit characterized by a 100 percent implicit tax rate however these workfare schemes are dominated by some nit programs this suggests that it may be necessary to have work requirements that vary across socio demographic classes for a workfare plan to be superior to any nit combining workfare with an nit could also be the prescription

a computational general equilibrium model with endogenous unemployment an analysis of the 1980 fiscal reform in mexico abstract in this paper we develop a general equilibrium model of the mexican economy in which unemployment and government deficits play important roles the unemployment rate depends on a downwardly rigid real wage in the urban sector the government runs a deficit simply by selling bonds that consumers consider perfect substitutes for physical capital as savings instruments the model is used to analyze the impact of the 1980 fiscal reform the presence of the rigid real wage and alternative specifications of government policies regarding the size of the deficit are found to have significant effects on the comparative statics results whether or not the reform improves the welfare of rural households compared to urban households for example depends on whether government policy is to keep the deficit constant or keep expenditures constant in response to changes in tax revenues

agricultural runoff as a nonpoint externality a theoretical development the purpose of this paper is to develop and explore a theory dealing with an important facet of agricultural runoff problems agricultural runoff is a nonpoint externality with notable implications for both research and policy a nonpoint externality exists whenever the externality contributions of individual economic agents cannot be practically measured by direct monitoring without monitoring regulations on emissions cannot be enforced and charges or subsidies cannot be assessed thus policies which are usually suggested for pollution abatement are not available there is great need for a theoretical base that can adequately capture these facts such a theory yields some important implications even before specific empirical applications the economic problem of agricultural runoff can be separated into three distinct categories first the sediment nutrients and chemicals removed by runoff represent a loss of resources to the individual farmer these costs are borne privately by farmers second if the discount rate of the individual farmer is greater than the social discount rate or if the farmer has a planning horizon which is shorter than society s the farmer will mine the soil resource at a rate which is more depletive than is socially optimal this is a temporal externality a third category involves the conservation of mass physical resources lost by the individual farm must appear elsewhere in the environment in sufficient quantities these resources are pollutants since water is the primary transport media for these resources it is water that is polluted by soil nutrients and agricultural chemicals this spatial externality has been the focus of much research here we intend to develop a theory for these issues to employ it to suggest a revised research methodology and to provide some important conclusions about alternative runoff policies only two of the three categories of agricultural runoff problems involve externalities and only the spatial externality is considered here

the wealth age relation among the aged aged people face the problem of allocating over the rest of their lifetimes the wealth that they have accumulated during their working years this problem is fairly complex because they are uncertain about the dates of their death and because they may wish to use their wealth to finance general consumption or hold it to meet emergencies leave estates or maintain power or status whether skilled at dynamic programming or not aged people effectively do make these decisions what are the results some studies of the entire lifetime pattern of saving and wealth tend to support the simple life cycle model in which the aged use up their wealth to help finance consumption harold lydall for example found saving rates to increase and then decrease with age in the whole population and to be negative for the group aged 65 and over guarded support for the theory was found by franco modigliani and albert ando in britain and by dorothy projector in the united states more recently a f shorrocks examined the lifetime pattern of wealth holding in estate tax data for a single cohort and found the hump pattern that is characteristic of life cycle saving other evidence on wealth holding runs contrary to this however in a study of estate tax returns in washington d c james d smith found that wealth increased with age among the aged after controlling for other demographic variables examining national estate tax data john brittain found wealth to increase with age in the united states and a b atkinson and a j harrison reported the same pattern in england and wales in a sample of tiaa annuity recipients analyzed by james mulanaphy over half reported that their total savings had increased during retirement and another quarter reported that their savings had remained about the same in this paper i examine wealth holding patterns among aged married couples using survey data representing the entire aged population of the united states in 1968 the statistical analysis serves as a test of the hypothesis that emerges from life cycle theory and provides some further exploration into the economic behavior of the aged i find that the aged tend to increase their wealth over time

efficiency of nonpoint source pollution instruments an experimental study in nonpoint source pollution problems the regulator does not observe each polluter s individual emission which prevents him from using the conventional policy instruments therefore new instruments have been designed to regulate this type of pollution in an experiment we compare the efficiency of some of these instruments an input based tax an ambient tax subsidy an ambient tax and a group fine we assume that polluters themselves are affected by environmental damages a control session without any regulation is also carried out in order to study the status quo situation our experimental data show that the input tax and the ambient tax are very efficient and reliable and the group fine is fairly efficient and reliable these instruments improve social welfare with respect to the status quo on the contrary the ambient tax subsidy decreases social welfare with respect to the status quo and its effect is very unreliable

the economic effects of production taxes in a stochastic growth model this paper analyzes the effects of stochastic taxes on production in simple stochastic growth model in so doing the paper explicitly examines the importance of uncertainty on the decisions of individual agents this importance is emphasized by comparing economic outcome to various realizations of tax rates under uncertainty and perfect foresight copyright 1990 by american economic association

multiple capital inputs q and investment spending despite their explicit treatment of dynamics and solid theoretical basis investment models based on the brainard tobin q have recorded a generally disappointing empirical performance when the q model is expanded to recognize the possibility that the value of the firm depends on two or more capital inputs with differing adjustment cost technologies the econometric equation following from optimizing behavior includes q as well as a set of additional explanatory variables the importance of these omitted variables is assessed and the capital homogeneity assumption for equipment and structures implicit in conventional q models is rejected the multi capital q model is then extended in two ways i adding inventory research and development and labor as quasi fixed factors and ii exploring the sensitivity of the instrumental variables estimates to normalization we conclude that the multi capital q model is a useful extension that overcomes an important omitted variables problem in the conventional q framework

the linkage between oil price shocks and economic growth with inflation in the presence of technological advances a cge model abstract this study examines whether oil price shocks are inflationary in the us we increase the price of oil in the year 2000 in a manner consistent with the oil price shock of 1973 74 and let the economy experience a hicksian technological change then using a dynamic computable general equilibrium cge model we conduct our analyses under two separate cases 1 regular economic growth and 2 low economic growth we also run three technological scenarios 1 no technology change 2 technological advances in the manufacturing and refining sectors and 3 technological advances in the manufacturing refining chemical and service sectors the effects of these changes are analyzed over the next 20 years until the year 2020 our results suggest that while a shock of the magnitude experienced in the 1970s will have a fairly severe effect on such things as gasoline and refinery prices the aggregate price changes will be largely dissipated over time at the aggregate level furthermore the aggregate level of prices cpi and ppi will fall over time as the level of technological advances rise under both growth scenarios there are several reasons why we would obtain such results first of all the structure of the us economy has changed remarkably since the early 1970s rather than being a manufacturing based economy the us is largely a service based economy today and hence it is more protected form raw materials shortages second the economy has had a steady history of strong growth and the faster an economy grows the quicker disruptions to that economy are dissipated finally our economy is experiencing rapid technological advances in information systems which have served to reduce costs and maintain output in a wide number of economic sectors

why nations become wealthy the effects of adult longevity on saving we analyze steady state and out of steady state effects of the transition in adult longevity on the national saving rate using historical data and international panel data the rise in adult life expectancy has a large and statistically significant effect on aggregate saving the effects have been especially pronounced in east asia because its mortality transition was very rapid gains in life expectancy are much more important than declines in child dependency population aging may not lead to lower saving rates in the future if life expectancy and the duration of retirement continue to increase

the effects of energy taxes on the kenyan economy a cge analysis abstract the paper utilizes a computable general equilibrium model to evaluate the impact of the second oil price shock and consequent energy tax policies on the kenyan economy simulations show that dramatic change in energy prices and consequent changes in domestic energy consumption generate sequential feedbacks in the production process and affect economic structures terms of trade deteriorate the balance of payments deficit increases and national income falls energy import tariffs and a sales tax are effective policy instruments in controlling energy consumption and increasing government revenue both energy policies have net negative effects on other economic activities similar to those observed under the oil price shock as long as there are no other economically feasible sources of energy supplies there are economic losses associated with less petroleum product consumption in a net oil importing developing economy with oil intensive production technology

climate policy and induced r d how great is the effect abstract carbon taxes or tradable permit systems to address climate change may induce research and development in energy related technologies we construct a single knowledge stock model of r d growth and climate to assess the importance of this effect the contribution of induced r d is shown to be very sensitive to i the duplication externality ii the feasibility of dedicated research subsidies to internalize inter firm knowledge spillovers iii the opportunity cost of r d iv the initial level of research expenditure and v the elasticity of substitution between energy and other factors of production in contrast the direction and scale of the inter temporal research spillover are of secondary importance we find strong support for rezai s 2011 argument that when the business as usual scenario no policy is modeled appropriately all externalities treated as external sacrifices for early generations associated with optimal climate policy are minor or non existent employing our preferred selections for the parameters we find that adding an induced r d component to the model increases the welfare impact of the first best policy optimally chosen carbon tax and research subsidies by an average value of more than 400 and of the second best policy carbon tax alone by approximately 22

the corporate tax in an intertemporal equilibrium model with imperfectly mobile capital this paper examines how alternative capital mobility assumptions affect the inci dence and efficiency of corporate income taxation it uses a two sect or intertemporal equilibrium model in which imperfectly elastic inves tment captures the notion of imperfectly mobile capital if investmen t is infinitely elastic which implies perfectly mobile capital a lo wer corporate income tax yields substantial efficiency gains and bene fits all agents if investment is less elastic however the economy wide efficiency gains are smaller and labor suffers welfare losses i f the goods supplied by the two sectors are close substitutes noncor porate capital loses also and only corporate capital benefits copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

second best agricultural policy abstract since full economic liberalization is not generally feasible getting the prices of selected agricultural markets right involves optimal price distortions a methodology is developed for calculating the second best output price in a particular market by incorporating externalities government revenue constraints and distortions in other markets into the marginal social cost and benefit schedules for that market in the illustrative application to thailand tax friction consumption externalities and the optimal tariff argument are seen to support an export tax on rice even though import tariffs already discriminate against agricultural exports

life cycle saving and dissaving in retirement abstract in a life cycle saving model with no bequest motive it is shown that aged persons may continue to accumulate wealth during the early years of retirement the key features of the model are the lack of borrowing opportunities and the recognition of empirically based mortality probabilities

the efficiency gains from dynamic tax reform this paper presents a new simulation methodology for determining the pure efficiency gains from tax reform along the general equilibrium rational expectations growth path of life cycle economies the principal findings concern the effects of switching from a proportional income tax with rates similar to those in the u s to either a proportional tax on consumption or a proportional tax on labor income a switch to consumption taxation generates a sustainable welfare gain of almost 2 percent of lifetime resources in contrast a transition to wage taxation generates a loss of greater than percent of lifetime re sources a second general result is that even a mild degree of progressivity in the income tax system imposes a very large efficiency cost this abstract was borrowed from another version of this item

economic effects of vat reforms in germany in the tax policy debate differentiation of value added taxes is often justified by distributional concerns our quantitative analysis for germany indicates that such concerns are misplaced we find that the abolition of vat differentiation has only negligible redistributive effects instead reduced vat are found to act as industry specific subsidies whereas the overall welfare effects of pure vat reforms are very small a revenue neutral introduction of a harmonised vat combined with reductions in the marginal income tax rates or social security contributions turns out to produce substantial welfare gains for all households

property tax classification and welfare in urban areas a general equilibrium computational approach abstract this paper examines some of the structural and welfare effects of a change from a tax system in an urban area that classifies property by use for tax assessment to one that does not discriminate in its treatment of property a long run general equilibrium model of intraurban spatial location is developed due to analytical intractability the tax policy changes are simulated by use of a fixed point algorithm the model is stylized to the boston metropolitan area to the extent possible general equilibrium versions of compensating and equivalent variations in income are used as measures of welfare change the qualitative welfare results obtained from sensitivity analysis are fairly robust in a substantial majority of the cases considered there is a welfare gain in moving from the particular tax classification structure posited to a system in which all property is taxed at the same effective rate

nonpoint source pollution taxes and excessive tax burden if a regulator is unable to measure firms individual emissions an ambient tax can be used to achieve the socially desired level of pollution with this tax each firm pays a unit tax on aggregate emissions in order for the tax to be effective firms must recognize that their decisions affect aggregate emissions when firms behave strategically with respect to the tax setting regulator under plausible circumstances their tax burden is lower under an ambient tax relative to the tax which charges firms on the basis of individual emissions firms may prefer the case where the regulator is unable to observe individual firm emissions even if this asymmetric information causes the regulator to tax each firm on the basis of aggregate emissions

the regulation of non point source pollution under imperfect and asymmetric information abstract this paper develops a bayesian framework for discussing the role of information in the design of non point source pollution control mechanisms an ambient concentration tax is examined allowing for spatial transport among multiple zones imposition of the tax requires costly measurement of concentrations in selected zones and the selection of zones for measurement must be undertaken without perfect information regarding several parameters of the problem potentially crucial information issues discussed include a the impact of asymmetric priors regarding fate and transport b the cost of measuring ambient concentration and c the optimal acquisition of information regarding fate and transport

cost effectiveness of alternative green payment policies for conservation technology adoption with heterogeneous land quality this paper quantitatively analyses the cost effectiveness of alternative green payment policies designed to achieve a targeted level of pollution control by heterogeneous microunits these green payment policies include cost share subsidies that share the fixed costs of adoption of a conservation technology and or input reduction subsidies to reduce the use of a polluting input the paper shows that unlike a pollution tax that achieves abatement through three mechanisms a negative extensive margin effect a negative intensive margin effect and a technology switching effect a cost share subsidy and an input reduction subsidy are much more restricted in the types of incentives they provide for conservation of polluting inputs and adoption of a conservation technology to control pollution moreover they may lead to varying levels of expansion of land under production costs of abatement with alternative policies and implications for production and government payments are compared using a simulation model for controlling drainage from irrigated cotton production in california with drip irrigation as a conservation technology

environmental policy under imperfect information incentives and moral hazard abstract when net emissions of individual polluters cannot be efficiently monitored then emissions charges controls on emissions levels or subsidies for emissions reduction are not effective as environmental policy instruments this paper proposes instruments that can be applied in such limited information situations these instruments take the form of contracts between a pollution control agency and individual polluters the contracts include a combination of fines and subsidies that induces dischargers to follow optimal environmental policies in the absence of individual monitoring

under and over use of pesticides an international analysis abstract this paper analyzes the economic political and environmental factors that contribute to the consumption and under or over use of pesticides using unbalanced panel data analysis we study how pesticide over or under use varies for countries with different per capita gross domestic product gdp and foreign direct investment fdi stock we begin by controlling for climatic and agricultural variables that should lead to variation in pesticide application rates the residual from the regression provides an indication of a nation s deviation in pesticide use relative to the mean the more negative the residual the more likely it is that that nation is under using pesticides the more positive it is the more likely it is that pesticides are being over used we study the correlation of this residual with important economic and political variables we find that at low levels of per capita gdp there is evidence of pesticide under use and that at the highest income levels there may be increasing over use we also look at the correlation of pesticide use with foreign direct investment stock farm size mechanization and democracy and in most cases find significant correlation with these variables

emissions reductions or green booms general equilibrium effects of a renewable portfolio standard renewable portfolio standards rps are commonly promoted as a policy tool to reduce emissions associated with fossil generation while also stimulating development of local renewable resource endowments we develop a general equilibrium model of an rps policy that captures key features such as a fixed factor renewable endowment substitution across sectors of the economy and endogenous price responses we analytically decompose the effects of an rps into a a substitution effect b an output tax effect and c an output effect we show that an increase in the rps can either deliver large resource booms or large emissions savings but not both our framework can translate different renewable resource endowments and pre existing standards across states into economic and environmental impacts to inform current renewable energy and climate policies

evaluation of external market effects and government intervention in malaysia s agricultural sector a computable general equilibrium framework the purpose of this study is to evaluate the effects of changes in the external trade environment and domestic economic policies on the agricultural development of malaysia the scope of this research also includes providing further insights into the strengths and weaknesses of the computable general equilibrium cge methodology for agricultural policy analysis the first analysis focuses on the export agriculture sector which encompasses malaysia s two primary agricultural commodities rubber and palm oil heavily dependent on exports of rubber in the 1950s and 1960s malaysia has since built a more diversified economy with strong emphasis on manufacturing export agriculture however is still an important component of the national economy the second objective examines the influence of domestic policy on agricultural development the simulation results demonstrate the growing resiliency of the malaysian economy to external shocks also they point to the domestic economy s ability to buffer internal policy induced distortions

ambient taxes when polluters have multiple choices economic research on environmental policy design has largely been concerned with the merits of emissions based economic incentives e g emissions charges emissions reduction subsidies transferable discharge permits ambient based tax subsidy schemes have drawn considerable interest in nonpoint pollution literature as alternatives to emissions based instruments expanding especially on segerson s seminal article this article examines the optimal design and budget balancing properties of ambient tax subsidy schemes under more realistic assumptions about the dimensions of firms choice sets than prior research

exogenous shocks contagion and bank soundness a macroeconomic framework abstract in a model where all banks are initially solvent an exogenous shock affects confidence causing a flight from deposits into domestic and foreign currency real interest rates increase unexpectedly affecting firms and raising the share of the banks nonperforming assets this contagion causes a bank run simulations show that compensatory monetary policy mitigates the bank run but causes macroeconomic imbalances combining compensatory monetary policy with tight fiscal policies slows the bank run and mitigates insolvency a devaluation combined with compensatory monetary policy reduces insolvencies and increases the growth of real income but at the cost of increased inflation

on economic disequilibrium and free lunch there is a sharp disagreement between mainstream economists and advocates of energy efficiency as regards the potential for free lunches or no regrets policies to cut greenhouse gas emissions from an economics perspective the critical question is whether the economic system is or is not close to a pareto optimum equilibrium state if so it follows that most technological systems now in place are optimum or nearly so from an economic perspective if not there may be many sub optimal technologies in place with corresponding opportunities for very high returns on appropriate investments this paper presents some of the evidence supporting the latter thesis

the parallel market of illegal aliens a computational approach abstract this paper develops the notion of illegal aliens as a parallel market in coexistence with the regular market of legal labor in the presence of both price controls on legal labor by minimum wage legislation and quantity controls on illegal aliens by immigration laws illegal aliens involve not only rural urban migration but also tax evasion and deportation costs we develop an analytical equilibrium structure which links markets for legal labor and illegal aliens illustrate how much an equilibrium can be computed and explore some implications of the linkage using united states data

trade liberalization in general equilibrium intertemporal and inter industry effects this paper uses a dynamic computable general equilibrium model to simulate the effects of unilateral reductions by the u s in tariffs and voluntary export restraints ver s we consider 50 percent cuts in tariffs and in ad valorem ver equivalents separately and in combination the model features intertemporal optimization by households and firms explicit adjustment dynamics an integrated treatment of the current and capital accounts of the balance of payments and industry disaggregation central findings include 1 ver s are considerably more significant than tariffs in terms of the magnitude of the macroeconomic effects induced by their reduction 2 while ver reductions enhance domestic welfare unilateral tariff cuts reduce domestic welfare as a consequence of u s monopsony power and associated adverse terms of trade effects 3 international capital movements critically regulate the responses of the u s and foreign economies to these trade initiatives and produce significant differences between short and long run effects and 4 effects differ substantially across industries together these findings indicate that simulation analyses that disregard international capital movements adjustment dynamics and industry differences may generate seriously misleading results

applied general equilibrium models for energy studies a survey the importance of energy in any economy developed or underdeveloped became clear after the first oil shock in 1973 since then different studies were carried out to formulate energy policies and to study their impact on the economies since energy policy issues are related to various aspects of the economy such as price formation output determination income generation and distribution consumption behaviour government operation etc a coherent and systematic mechanism is required for such analysis by offering such a framework of analysis age models gained popularity among energy modellers in the 1980s the environmental issues have gained importance and the focus shifted towards curbing and containing emissions of environmentally unfriendly gases resulting from the use of energy age models because of their capability to capture the complexities of the economy have found relevance in analysing the economic impacts of controlling pollution and greenhouse gases this paper surveys the literature on such general equilibrium models as applied to energy studies and reports their special features evolution through time as well as their limitations

external sector closing rules in applied general equilibrium models abstract this paper examines formulations of external sector behavior adopted in some of the recent applied general equilibrium models in many cases these models are constructed for single economies and the model builder attempts to use a convenient external sector specification to close the model issues and difficulties with export demand and import supply functions for foreigners which satisfy trade balance and the modeling of small economy price taking behavior are explored

measuring the marginal cost of nonuniform environmental regulations a method is presented for measuring the marginal welfare cost of environmental regulations affecting agriculture the method incorporates output market effects and recognizes diversity in production conditions among crops regions and seasons an important advantage of the method is that only regional outputs and changes in regional production costs are needed to calculate deadweight loss thus simplifying the measurement of welfare changes this feature of the model is significant since the complexity and substantial data requirements of most existing impact models cause many environmental regulations to be enacted with inadequate analysis of their economic impacts the method also disaggregates welfare impacts by crop place and time thus encouraging the implementation of nonuniform interventions that achieve a given level of environmental quality more efficiently than uniform policies

the welfare cost of factor taxation in a perfect foresight model this paper examines the marginal efficiency cost of various factor taxes in a dynamic general equilibrium model the au thor solves for the excess burden of anticipated and unanticipated t emporary and permanent tax policies using a range of estimates for taste and technology parameters he finds excess burdens larger than those indicated by previous studies that use static models these exc ess burdens are sensitive to parameter values and timing however th e rankings of alternative tax policies turn out to be insensitive to structural parameter values copyright 1987 by university of chicago press

research issues in nonpoint pollution control research on nonpoint pollution control instruments has focused primarily on incentives applied either to production inputs that affect nonpoint pollution or to ambient pollution concentrations both approaches may in theory yield an efficient solution however input based incentives will generally have to be second best to make implementation practical design issues include which inputs to monitor and the rates to apply to them the limited research indicates that second best input based incentives can be effective in adjusting input use in environmentally desirable ways alternatively ambient based incentives have theoretical appeal because efficient policy design appears to be less complex than for input based incentives these incentives have no track record nor close analogues that demonstrate potential effectiveness however research on how households and firms might react in response to ambient based incentives is needed before these instruments can be seriously considered

uniform and non uniform second best input taxes we investigate second best input based taxes foragricultural nonpoint pollution control when marketprices are endogenous and production isheterogeneous theoretically we derive the optimalforms of taxes which take account of heterogeneity non uniform taxes and a tax which does not auniform tax empirically we use a multi factor market equilibrium simulation model to determineoptimal tax rates and associated equity effects particularly differences in landowner gains lossesacross a heterogeneous region when market prices areendogenous second best tax policies result inpecuniary externalities that affect existingenvironmental externalities in particular thepecuniary externalities amplify the effect of producerheterogeneity on determination of sub regionaldifferences in tax rates and returns to land particularly for the uniform policy with endogenousprices the uniform tax rate is considerably higherthan any of the non uniform rates and ironically thenon uniform taxes result in less dispersion oflandowner gains across sub regions than the uniformtax

cost effective and stochastic dominance approaches to stochastic pollution control most economic studies of pollution externalities focus on the relative efficiency or cost effectiveness of alternative pollution control instruments much less attention has been paid to policy goals and objectives however a comprehensive pollution control strategy depends on all of these choices this paper examines several efficiency properties of cost effective pollution control strategies in a stochastic setting when economic damages from pollution are unknown a number of policy goals are considered in this setting and under a primal approach it is found that certain stochastic dominance conditions must be satisfied for the strategies to exhibit desirable efficiency properties a dual approach to cost effective pollution control which is based on a stochastic dominance objective is also considered

uncertain lifetime consumption and dissaving in retirement this paper asks whether the continued accumulation or mild dissaving observed among the retired can be explained by uncertain lifetime in the absence of annuities after an initial period influenced by borrowing constraints under constant relative risk aversion uncertain lifetime depresses consumption by a proportion increasing with age if the elasticity of intertemporal substitution in consumption is small illustrative computations based on actual income and survival data show that plausible elasticities are sufficiently small to give this effect the reduction in consumption is large enough to explain much of the lack of decumulation by the elderly

bank failures and fiscal austerity policy prescriptions for a developing country abstract this work employs a dynamic general equilibrium model to evaluate the causes and implications of bank insolvencies we apply the model to stylized data from bangladesh a country whose banking system is currently suffering from large stocks of non performing assets the model is used to derive positive conclusions about alternative policy instruments designed to alleviate the impact of these insolvencies a benchmark case is simulated using historical exogenous parameters we then generate a bank failure by assuming that firms cannot service their debt if their interest obligations rise above their anticipated return on capital the public withdraws deposits from the banking system in reaction to worries about defaulting bank assets if banks optimize by restricting credit to risky borrowers these failures can be partially avoided such bank behavior is often prohibited in developing countries so we investigate an active monetary policy that compensates banks for withdrawn deposits the resulting outcome indicates that such a policy can slow the pace of bank failures although at the cost of certain macro imbalances our final simulation imposes a reduction in public spending in order to tighten fiscal policy and thereby reduce budgetary pressure the resulting decline in interest rates eliminates all investor defaults and bank failures we conclude that the combination of compensating monetary policy and restrictive fiscal policy may offer the best way of responding to a bank crisis

the displacement and multiplier effects of regional selective assistance a computable general equilibrium analysis this paper uses a hybrid approach to simulate the effects of regional selective assistance rsa for scotland this combines industrial survey estimation of the direct impacts and computable general equilibrium cge modelling of the system wide effects the results are compared to those derived using the method currently adopted in official evaluation studies of rsa and other regional regeneration policy instruments the cge approach captures capacity labour market displacement and migration effects ignored in existing studies simulation identifies the conditions under which these effects are likely to be quantitatively important a partir d une facon hybride cet article cherche a simuler pour l ecosse l impact des primes regionales une estimation des effets directs a partir d une enquete aupres de l industrie se voit allier a la modelisation des effets generalises par une analyse d equilibre general sur ordinateur on compare les resultats a ceux qui proviennent des methodes employees actuellement

economic incentives for managing filterable biological pollution risks from trade infectious livestock disease problems are biological pollution problems prior work on biological pollution problems generally examines the efficient allocation of prevention and control efforts but does not identify the specific externalities underpinning the design of efficiency enhancing policy instruments prior analyses also focus on problems where those being damaged do not contribute to externalities we examine a problem where the initial biological introduction harms the importer and then others are harmed by spread from this importer here the externality is the spread of infection beyond the initial importer this externality is influenced by the importer s private risk management choices which provide impure public goods that reduce disease spillovers to others making disease spread a filterable externality we derive efficient policy incentives to internalize filterable disease externalities given uncertainties about introduction and spread we find efficiency requires incentivizing an importer s trade choices along with self protection and abatement efforts in contrast to prior work that targets trade alone perhaps surprisingly we find these incentives increase with importers private risk management incentives and with their ability to directly protect others in cases where importers can spread infection to each other we find filterable externalities may lead to multiple nash equilibria

on the effects of investment tax credits on economic efficiency and growth abstract this paper explores the overall efficiency effects of itcs in the context of a disaggregated dynamic general equilibrium simulation model of the u s economy this model postulates forward looking investment decisions and allows for optimal government borrowing and financial crowding out simulation results confirm the conventional wisdom that itcs are distortionary but challenge the equally conventional wisdom that itcs necessarily spur investment and gdp in addition results point to an important policy trade off introducing itcs without neutralizing their budgetary effects would lead to low efficiency losses but would reduce investment and gdp due to financial crowding out in turn imposition of itcs while blocking their budgetary effects would lead to relatively large efficiency losses while minimizing the negative impact on investment and gdp

the interface between environmental and trade policies last march i gave the frank paish lecture to the society under the title economic life in a greenhouse in my lecture i tried both to survey professional opinion as to some of the possible climatic implications of the greenhouse effect and also to draw out the economic consequences which might follow towards the end of my talk i made reference to some preliminary joint work with randy wigle 2 a colleague at wilfrid laurier university in canada on the global consequences of carbon tax schemes designed to limit and or reduce the build up of co2 emissions a key element underlying the greenhouse effect the written version of the lecture consciously does not reproduce the survey material which made up the first part of the lecture instead it elaborates on the issues raised towards the end it incorporates the work by randy wigle and myself and offers some thoughts on what seems to be a growing issue for the iggos namely the consequences for the international trading system of interactions between trade issues and both future global and current national environmental policies what follows emphasises that if they occur in the next few decades global policy responses3 carbon taxes tradeable permit schemes to environmental concerns will almost certainly have large economic effects among these are likely to be significant effects on trade patterns and trade volumes large interregional effects will also accompany such policies depending upon how such policies are implemented also the i99os may see a growing use of trade measures to achieve objectives set for environmental policies environmental policies towards such countries as brazil the philippines and others where deforestation is a concern may increasingly take the form of threatened trade sanctions unless compliance with global environmental policy objectives occurs 4

taxing tourism and subsidizing non tourism a welfare enhancing solution to dutch disease abstract using a combined analysis of a general equilibrium and a partial equilibrium this study models the impacts of a combined policy tool based on taxing tourism and subsidizing non tourism in a tourism dependent destination the results suggest that such a policy tool while widely discussed in economics literature may not be suitable for a tourism destination as it might have adverse effects on local welfare