interjurisdictional spillovers decentralized policymaking and the elasticity of capital supply a key question in the fiscal federalism literature is whether decentralized policymaking in an economy with spillovers among jurisdictions leads to an efficient outcome see e g oates 1972 a striking example where this question is of particular importance is the current debate on global warming the failure of the copenhagen summit in late 2009 has shown impressively that centralized solutions to the climate change problem are hard to realize one might thus want to know whether a decentralized policy approach where each country chooses its own climate policy without coordinating it with the climate policy of other countries gives hope for an efficient policy outcome further important examples of decentralized decision making in the presence of interjurisdictional spillover effects can be found in the decentralized provision of education and infrastructure at first glance it is hardly imaginable that decentralized policymaking can ever be optimal it is not only the very existence of spillovers that causes doubt the policy instruments themselves also create policy externalities despite this presumption against the efficiency of decentralized policymaking the previous literature provides several studies in which decentralization leads to an undistorted policy choice an important example is the paper of oates and schwab 1988 who argue that the choice of capital taxes in an economy with identical jurisdictions mobile capital and local pollution may indeed be efficient in a remarkable recent paper ogawa and wildasin 2009 extend the analysis to account for transboundary pollution spillovers and asymmetric countries and still get the efficiency result in their model emissions and thus the extent of spillovers generated by a jurisdiction is proportional to capital employed in this jurisdiction the choice of capital taxes is then distorted by the jurisdictions incentives for tax competition and by the jurisdictions disregard of spillover effects but the key argument is that both distortions just neutralize each other and thereby lead to efficient capital tax rates our paper contributes to this literature and points to the important role that the elasticity of aggregate capital supply with respect to the net rate of return to capital plays for the efficiency of decentralized policymaking in accordance with the previous literature we show that under a fixed capital supply zero capital supply elasticity the decentralized policy choice is indeed optimal if the capital supply elasticity is strictly positive however capital tax rates are inefficiently low in the decentralized

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

electricity prices and industrial competitiveness a case study of final assembly automobile manufacturing in the united states and canada this paper studies the real and perceived impacts of electricity pricing on competitiveness in the united states and canada financial analysis is combined with interviews to explore whether and how the cost of electricity affects competitiveness in one of north america s most important sectors automobile manufacturing the cost of electricity in top automobile manufacturing jurisdictions in canada and the us is captured over a six year period starting in 2010 at between approximately us 2 00 and 11 00 per vehicle the paper finds that the per vehicle gap between electricity costs in the most expensive automobile making jurisdiction in north america ontario and all others is quite small how then to explain the preoccupation of industry actors with electricity costs in ontario several reasons are suggested including media coverage the relatively narrow inventory of issues under local management control and mechanics of the pricing system itself the paper explains how the pricing system causes manufacturers to make decisions that depart from core mandates making things and generates the unintended effect of heightened scrutiny a combination of factors that has the effect of aggravating tension around electricity pricing and damaging perceived competitiveness

the implications of competition among jurisdictions does tiebout need politics the paper investigates whether compensation among local jurisdiction is by itself sufficient to ensure efficient provision of local public goods jurisdictions have fixed boundaries and each has an entrenched government with the power to tax and supply the public good residents can move costlessly among jurisdictions it is shown that competition among numerous jurisdictions is not sificient to guarantee public sector efficiency though residents can vote with their feet land is immobile hence governments can unsurp some land rents for their own ends increasing the number of jurisdictions limits but cannot completely eliminate the ability to exercise discretionary governmental power

household behavior in a monocentric urban area with a public sector abstract this paper has examined how a public sector alters the model of urban household behavior and its predictions the qualitative housing price and demand location characteristics remain unchanged by the introduction of either an exogenous or endogenous public sector in addition the household s response to tax rate and public service changes depend solely upon the nonlocational demand relationships the major impact of location per se on the household s demand vector is through an additional hicksian price term whether locational effects reinforce or vitiate nonlocational demand changes depends upon the compensated relationship between the good in question and housing this paper also investigated the design of neutral public budgets government budgets using property income or comprehensive sales taxes to finance public services cannot be neutral with respect to housing demand and location of the four types of taxes considered only a narrow based sales tax can finance public services neutrally

wages competition and the surplus of labour a classical contribution to explaining profit this paper proposes a reconstruction of one of torrens little known pieces of work on the making and the distribution of income among the social classes the framework assumes a single good economy with fixed production coefficients it differs from the contemporary ricardian theory i e sraffa s in three ways i the real wage is depicted as the economic outcome of competition in the labour market ii the allocation of the net product between wages and profits is determined with no obligation to fix exogenous variables of distribution and iii the model suggests an innovative concept of surplus labour to define profit apart from the labour theory of value finally torrens approach lays the foundations of an original conception of profit explained by a specific transaction of capitalism economy

a political economy theory of partial decentralization we revisit the classic problem of tax competition in the context of federal nations and derive a positive theory of partial decentralization a capital poor median voter chooses to use redistributive capital taxes to provide public goods the expectation of high capital taxes however results in a small capital stock which lowers returns to redistribution the median voter therefore wants to commit to a lower level of capital taxes she does so by setting a partial degree of decentralization in the constitution the equilibrium degree of decentralization balances the positive effect of tax competition on capital taxes with the loss in redistribution that results we show that the degree of decentralization is nonmonotonic in inequality increasing in the redistributive efficiency of public good provision and decreasing in capital productivity when public goods are heterogeneous in their capacity to transfer funds all voters agree that goods with high redistributive capacity should be decentralized

capitalization and the theory of local public finance the tiebout literature is incomplete this paper argues because it has not fully accounted for the capitalization of local fiscal variables into house values the paper explains why capitalization arises why it persists in long run equilibrium how it affects both residential location and the outcome of local voting and why it interferes with the efficiency of a system of local governments the analysis which is based on the main tiebout assumptions plus a property tax combines a model of household bids in a housing market with a median voter model of local public service determination

corn models in the classical tradition p sraffa considered historically this paper deals with the historical plausibility and analytical validity of what has come to be termed the corn model the ongoing debate is firstly reviewed it is suggested that a definite answer should be based on the logic of the material produce comparisons although these do not lead invariably to a sound application of the corn model neither do they constitute per se a sign of classicism however it is shown that before and after ricardo corn models of various sorts and logical stringency were developed in order to cope with the problem of 1 the determination of the rate of profit in the only basic sector of the economy agriculture independent of any valuation and 2 its primacy over the overall economy copyright 1991 by oxford university press

ricardo torrens and sraffa a summing up this paper discusses the existence of a corn ratio theory of profits in robert torrens s works the ricardian origin of which is avowed by torrens himself this constitutes significant evidence in favor of piero sraffa s reading of ricardo s early theory of profits samuel hollander s 1995 rebuttal of this evidence is also discussed and found to be based on a seriously flawed reading of the relevant texts c 1996 academic press limited copyright 1996 by oxford university press

on welfare measurement in cities this paper extends project evaluation in a spatial urban economy to consider the more general case of distortionary public finances if a local public improvement is financed at least in part by a distortionary property tax we show that residential land prices do not accurately measure the value of land improvements even when households are identical and the improvement is infinitesimally small the magnitude and direction of the measurement error will depend on the second order effects on aggregate demand via changes in population density at each location and on overall city size

hedonic prices and the benefits of public projects s scotchmer has shown that even if the population is homogeneous hedonic prices do not correctly measure long run benefit s of a large public project this paper examines the direction of err ors and shows that the use of cross sectional land rent differentials leads to overestimation of the benefits the short run benefits with fixed lot size are also considered copyright 1988 by the econometric society

further evidence for sraffa s interpretation of ricardo samuel hollander 1973 1975 1979 has attracted much attention by disputing piero sraffa s famous corn model interpretation of ricardo s 1815 essay on profits john eatwell 1975 and more recently pierangelo garegnani 1982 in this journal have come to sraffa s defence at issue is sraffa s suggestion contained in the introduction to the first volume of his edition of ricardo s works that the rational foundation of ricardo s dictum that the profits of the farmer regulate the profits of all other trades is the assumption that the inputs and outputs of agricultural production are roughly homogenous and that the rate of profit in agriculture may therefore be conceived as a ratio of physical quantities independent of valuation sraffa 1951 p xxxi eatwell and garegnani base their defences of this proposition upon exegeses of the relevant text and correspondence in this short paper i will show that further evidence in support of sraffa s view may be found in a now little known article written by robert torrens which appeared in the edinburgh review of october 1819 1 that article which was ostensibly a review of four pamphlets of robert owen and which bore the running title mr owen s plans for relieving the national distress details a corn model theory of profits in much more explicit terms than does ricardo s essay on profits ricardo moreover was not only familiar with the article but wrote approvingly of it in several letters to j r mcculloch on 28 february 1820 he wrote

eco dumping capital mobility and international trade a small open economy s optimal environmental policy is studied in a model with international capital mobility and local pollution the country produces traded as well as non traded goods is it in the country s interest to engage in ecological dumping by choosing generous pollution allowances for the traded good sector the answer depends decisively on the policy regime in use dumping is not optimal if the country ensures that the implicit rent on pollution is completely appropriated within the country however if the implicit factor reward on pollution leaves the country because it accrues to foreign owners of mobile capital the local welfare maximizing government tends to discriminate against the traded good sector the opposite of ecological dumping

the corn model gluts and surplus value the controversy over ricardo s corn model has focused on the interpretation of his early writings here ricardo s later use of a corn model example in his dispute with malthus over gluts is discussed malthus s own use of a corn model table in attempting to justify his use of a labour commanded measure of value is analysed it is shown that he calculates what marx was to describe as surplus value from the physical conditions of production and the real wage copyright 2006 oxford university press

price specification and the demand for public goods abstract nearly all public expenditure demand studies define the marginal price for publicly provided goods as the household s share of the local property tax burden or what is often called the tax price such a definition is at odds with two familiar facts taxes are ordinarily distortionary and property values are often influenced by the value of local services this paper constructs a theoretically consistent marginal tax price measure incorporating these considerations the new measure demonstrates that previous estimates of the price and income elasticities of demand for public services are biased except under very restrictive circumstances moreover the direction of this bias will depend upon the actual incidence of public spending and the tenure status of residents

optimal fiscal policy for a state or local government abstract state and local government services are enjoyed by and taxes borne by two groups residents and non residents this paper addresses the question if state and local governments maximize their residents welfare and cannot distinguish between individual residents and non residents but know the aggregate characteristics of the two groups what set of taxes subsidies and public goods should they choose some of the results obtained are i even when all commodities are taxable and equity is ignored the existence of non resident consumption makes uniform taxation non optimal ii in some cases whether a commodity should be taxed or subsidized is independent of its own price elasticity iii central cities may be subsidized by suburban residents and iv the ability of state and local governments to redistribute is inversely proportional to the openness of the economy

public input competition abstract public investment in infrastructure may help create agglomeration economies by attracting mobile factors such as skilled labour competition among regions in public investment can then be destructive this paper analyzes the nash equilibria to a simple model of public input competition even though the regions are assumed identical the equilibrium may not be symmetric the problem with non cooperative behaviour is not only that regions invest too much but that too many regions may choose to invest depending on the parameter values the nash equilibrium may be efficient may be inefficient or may not exist at least not in pure strategies better mobility among regions leads to more aggressive competition the analysis suggests that rents from public investment may be dissipated by governments competition to attract mobile factors

international competition in corporate taxation evidence from the oecd time series despite numerous studies controversy remains about the impact of economic globalization on corporate taxation theoretical models of tax competition generate different predictions about trends in the level of tax burdens and the degree of convergence in tax burdens across countries in this paper we present a purely empirical analysis of the evolution of tax burdens across oecd countries since the 1950s issues of measurement and methodology have contributed to the inconclusive character of studies to date so we begin with an assessment of alternative measures of the burden problems with some commonly used measures of the tax burden are considered and the most plausible measures identified descriptive analysis of these time series reveals no evidence of a competitive race to the bottom in corporate taxation and little evidence of even a harmonization of the tax burden many inferential studies of corporate taxation base their conclusions on cross sectional analysis in contrast we adopt an explicitly time series method to what are essentially time series questions cointegration methodology originally developed to study issues of convergence of living standards is applied and fails to reveal evidence of convergence of tax burdens for the oecd and europe as a whole it does however indicate that there has been some harmonization within smaller groups of countries mainly in northern europe important questions remain about the effectiveness and impact of corporate taxation in an increasingly open and integrated global economy but we find little evidence to support fears that the burden of taxation is being lifted from corporations kenneth stewart and michael webb

property value maximization and public sector efficiency abstract this paper analyses the efficiency implications of property value maximization communities are open so that utilities are parametric to housing producers and the local government each local government chooses its public good output to maximize aggregate property value in the community ignoring feedback effects on the composition of the housing stock it is shown that this type of government behavior generates an equilibrium in which all communities are internally pareto efficient

tax competition uniform assessment and the benefit principle abstract in previous discussions it has been argued that tax competition between local governments results in a tax burden on business that is less than the cost of public services for business and in suboptimal levels of public expenditures for residents however this conclusion has never been substantiated by a full theoretical treatment here a theoretical model of tax competition is developed between metropolitan areas with labor perfectly immobile and two local public goods one for residents and one for business for plausible parameter values numerical solutions of the optimality conditions are computed by means of a nonlinear programming algorithm

the journey towards decarbonization exploring socio technical transitions in the electricity sector in the province of ontario 1885 2013 and potential low carbon pathways this article employs the multi level perspective on socio technical transitions to explore the historical evolution of the electricity regime in the province of ontario from 1885 2013 and to interpret the potential for future movement towards decarbonization with an emphasis on the political and social dimensions of transitions this analysis traces the key features influencing change within ontario s electricity system over the past century this paper uses multiple criteria the phase of electrification role of the electricity system in economic development structures of ownership market and regulation dominant technologies and the relative stability of arrangements to characterize distinct regime configurations and periods of instability which separate relatively stable system orientations lessons are drawn from the historical case with implications for future decarbonization in the province including the importance of 1 residual momentum 2 embedded guiding principles and 3 politico economic coalitions

the political economy of tax coordination as a bargaining game between bureaucrats and politicians in the public finance literature the view prevails that taxcompetition among countries gives rise to an underprovision ofpublic goods and that coordinated tax increases are thereforedesirable public choice arguments in contrast suggest thattax coordination may not be in the interest of thetaxpayers citizens because imperfections of the politicalprocess political distortions may lead to a waste of taxmoney according to this view tax competition is a desirablecheck on the power to tax whereas tax coordination would onlyrelax the budget constraint of an inefficient public sector the present paper integrates the underprovision argument andthe public choice view into a common theoretical framework the government is assumed to consist of politicians andbureaucrats with diverging interests fiscal policy ismodelled as the outcome of a bargaining game between thebureaucrats and the politicians it turns out that coordinatedtax increases always raise the provision of public goods butalso increase the cost of political distortions the effect onthe welfare of the representative citizen may be positive ofnegative depending in particular on the distribution ofbargaining power between bureaucrats and politicians

international tax coordination regionalism versus globalism tax competition for mobile capital can undermine the attempts of governments to redistribute income from rich to poor i study whether international tax coordination can alleviate this problem using a general equilibrium model synthesizing recent contributions to the tax competition literature the model highlights the crucial distinction between global tax coordination and regional coordination with high capital mobility between the tax union and the rest of the world the welfare gain from regional capital income tax coordination is only a small fraction of the gain from global coordination even if the tax union is large relative to the world economy

decentralization as a constraint to leviathan a panel cointegration analysis this paper extends the empirical literature about the effects of fiscal decentralization on the growth of government along three dimensions it distinguishes between the effects of the level of decentralization from the way local governments finance their expenditures common pool versus own resources it uses a panel cointegration approach to separate the long run effects of decentralization from the short run dynamics and it extends and revises the datasets generally used in these empirical analyses the results show that the amount of revenue raised by sub national governments leads to a long term fall in the size of government but grants have the opposite effect in addition a greater decentralization of expenditure leads to greater overall spending when the short term is considered these influences work slowly as the speed of adjustment towards the desired government size is relatively sluggish in addition in the short run there is also a clear effect from the role of local revenue raising powers that stimulates the growth of government these results appear robust to changes in the composition of the variables countries and periods included the sample

pigou tiebout property taxation and the underprovision of local public goods abstract pigou s proposition that the use of distorting taxes rather than neutral head taxes reduces public service levels is examined in this paper a simple model with a national system of competing local governments is utilized to demonstrate that the use of a distorting property tax on mobile capital decreases the level of residential public services the case where public services are an intermediate producer good is also considered

urban economic theory land use and city size this book examines the economic reasons why people choose to live where they live and develops through analysis of the bid rent function a unified theory of urban land use and city size the first part of the book explicates the basic theory of urban land use and optimal city size residential location behavior of households is examined in a microeconomic framework and equilibrium and optimal patterns of residential land use are discussed the corresponding equilibrium and optimal city sizes are studied in a variety of contexts part two extends the classical theories of von thunen and alonso with the addition of externality factors such as local public goods crowding and congestion and racial prejudice the rigorous mathematical approach and theoretical treatment of the material make urban economic theory of interest to researchers in urban economics location theory urban geography and urban planning

interpreting ricardo a rejoinder to peach this note answers terry peach s 1998 response to our criticisms of his interpretation of ricardo we show that the available evidence supports sraffa s interpretation the arguments put forward by peach far from undermining that interpretation or furthering an understanding of ricardo s project do little more than catalogue the already well known difficulties that ricardo encountered as he grappled toward a clearer account of the laws that regulate distribution and prices copyright 2002 oxford university press

professor garegnani s defence of sraffa on the material rate of profit in two articles 1973 1975 and in my economics of david ricardo 1979 i have given a blow by blow account of the evidence relating to ricardo s position on profits professor garegnani s 1982 criticisms do not lead me to retract much of his argument is based on circumstantial evidence and fails to make accurate use of what ricardo actually wrote on the matter although he is aware of the materials available the most useful path for me now is to review some of the key issues limiting myself however to an examination of the evidence presented by sraffa who originated the hypothesis which is in dispute there is no point in going further if this matter is not resolved

reviving leviathan fiscal federalism and the growth of government this article revisits the influential leviathan hypothesis which pos its that tax competition limits the growth of government spending in decentralized countries i use panel data to examine the effect of fiscal decentralization over time within countries attempting to distinguish between decentralization that is funded by intergovernmental transfers and local taxation first i explore the logic whereby decentralization should restrict government spending if state and local governments have wide ranging authority to set the tax base and rate especially on mobile assets in countries where this is most clearly the case decentralization is associated with smaller government second consistent with theoretical arguments drawn from wel fare economics and positive political economy i show that governments grow faster as they fund a greater portion of public expenditures through intergovernmental transfers

ricardo torrens and sraffa the untenability of de vivo s summing up giancarlo de vivo 1996 repeats his argument of 1985 that the second edition of torrens s essay on the external com trade 1820 provides significant corroboration of sraffa s reading of ricardo s early theory of profits 1996 p 387 there runs his assertion torrens presents a corn model and goes out of his way to acknowledge his indebtedness to ricardo s original and profound inquiry into the laws by which the rate of profit is determined 1820 p xix he takes issue with my contention that this case has not been convincingly made hollander 1995 a rereading of the evidence stimu lated by de vivo s remarks leaves me wholly unconvinced in fact his restatement confirms the untenability of his position i shall explain why as in 1985 p 95 de vivo again concedes torrens s weakness in allowing for materials in manufacturing capital in whatever proportion the quantity of produce obtained from the soil exceeds the quantity employed in raising it in that proportion the value of manufactured goods will exceed the values of the food and material expended in preparing them torrens 1820 p 362 1826 p 75 1 it would have helped had de vivo recognised the implications of this weakness for his theme that torrens s position confirms the validity of sraffa s interpretation of ricardo instead of reiterating that this problem of materials only arises in the manufacturing sector and does not affect the corn ratio determination of profits 1996 p 389 de vivo s italics for the problem remains that the sraffa interpretation requires homogeneity of capital in all sectors if there is to be a uniform rate of profit in all trades it is the exchangeable values of the products of other trades relatively to their own capitals i e relatively to corn that must be adjusted so as to yield the same rate of profit as has been established in the growing of corn sraffa 1951 p xxxi this is all i intended when i wrote that de vivo s recognition of a weakness in torrens amounts in effect to admitting that we do not have a sraffa model 1995 p 486 de vivo s case might be strengthened if one assumed the corn material price ratio to be constant there is perhaps a hint of this in torrens himself when the cultivation of inferior soils increases the productive cost and consequently the

a critique of tiebout s theory of local public expenditures the last section of this paper presents a rigorous version of tiebout s theory of local public goods it is shown that equilibria exist and are pareto optimal this rigorous theory follows closely the more rigorous part of tiebout s work this rigorous theory makes a number of very special assumptions which make local public goods essentially private the body of this paper presents a series of examples which show that if one tries to generalize the rigorous version of tiebout s theory in a number of interesting directions then equilibria may no longer exist or may not be pareto optimal the conclusion is that tiebout s idea does not lead to a satisfactory general theory of local public goods the goal of this paper is to point out that tiebout s notion of equilibrium with local governments does not have the nice properties of general competitive equilibrium except under very restrictive assumptions tiebout 39 suggested that there are competitive forces which tend to make local governments allocate resources in a pareto optimal fashion consumers choose to live in those towns with the mix of taxes and public goods they prefer local governments choose this mix so as to attract inhabitants this idea may seem intriguing for it suggests that the invisible hand solves an important part of samuelson s perplexing public goods problem 32 tiebout in fact makes an argument which is nearly rigorous i give a rigorous version of his argument at the end of the paper however in this rigorous version so many restrictive assumptions are made that public goods become essentially private in the body of the paper i give a series of examples with which i try to convince the reader that one is forced to adopt tiebout s restrictive assumptions the idea is that if one changes any of his assumptions then either equilibria may not exist or may not be pareto optimal my examples are presented in the context of a general class of tiebout models i consider several subclasses one of which is the special case considered by tiebout in each of the subclasses except that considered by tiebout i give a counterexample either to the existence of equilibrium or to its pareto optimality the subclasses are so chosen that the difficulties they reveal would be shared by any reasonable tiebout model which differed from his special case i believe that my examples controvert tiebout s suggestion 39 last paragraph that his theory compares favorably with competitive equilibrium theory most of the examples in this paper have already appeared in the literature i cite related work as i go along what is new here is that i assemble the examples in a unified argument

the tiebout model bring back the entrepreneurs several recent papers in the literature have reformulltlated the nature of equilibrium in ifiebout mo lels by alssliuim ing an exogenous number of communities inflexible commullity l ou alaries anti in pirticular inactive lantlowners and developers ihis paper argues that these assumptions are unwarranted and resul1t iin in eterminate solutions and incorrect analyses determinate lon1g run1 solutions require equilibrium in intercommui land markets which in turn require giving lantlowners and or entrepreneurial leveloelers an active role in the models the role of politics in these models and its juxtaposition with entrepreneurial activities are also analyzed

regime destabilisation as the flipside of energy transitions lessons from the history of the british coal industry 1913 1997 this paper investigates a neglected aspect of the transitions literature the destabilisation of existing regimes and industries it presents an analytical perspective that integrates four existing views on destabilisation and conceptualizes the process as a multi dimensional and enacted phenomenon involving technical economic political and cultural processes this perspective is illustrated with two historical cases of the british coal industry 1913 1967 1967 1997 these cases are also used to articulate five lessons regarding the overall destabilisation process and five lessons regarding the economic and socio political environments of industries the conclusion section translates the historical lessons into insights with relevance for the contemporary challenge of climate change and transitions to low carbon energy systems

who benefits from partial tax coordination in this paper we investigate whether partial tax coordination is beneficial to countries within and outside a tax union in which countries are supposed to compete in taxes and infrastructure our results demonstrate that a subgroup of countries agreeing on a common tax rate can harm both member and nonmember states this is in contrast to the classical findings that partial tax harmonisation is pareto improving when a minimum tax rate is imposed within a tax union we demonstrate that it does not necessarily improve the welfare of the member countries moreover both the high tax and low tax countries can be worse off this conclusion is at odds with the classical result that a high tax country benefits from the imposition of a lower tax bound

theory and estimation in the economics of housing demand the main purpose of this paper is to review recent theoretical and empirical developments in the economics of housing demand in particular we ask what is known concerning the permanent income elasticity of housing demand vis a vis the current or measured income elasticity what is known concerning price elasticities what is the appropriate functional form for housing demand equations what is the role of demographic variables what is known concerning dynamic aspects of housing demand what appear to be the major sources of bias in existing estimates of demand equations

how a race to the bottom can make you fat abstractthis article measures the effect of fiscal competition on obesity rates in the united states through education and health spending we hypothesize that fiscal competition to attract firms r

endogenous timing in the presence of non monotonicities the aim of this paper is to generalize the endogenous timing game proposed by hamilton and slutsky games and economic behavior 1990 2 pp 29 46 by allowing the payoff or the marginal payoff of a player to become non monotonic with respect to the strategy of the opponent we propose a taxonomy of the subgame perfect nash equilibria based on the characteristics of the payoff functions proposed by eaton canadian journal of economics 2004 37 pp 805 29 we determine under which conditions of the initial payoff functions commitment has a social value and when the simultaneous move nash equilibrium is commitment robust and discuss its pareto efficiency

corporate income taxation of multinationals in a general equilibrium model abstract this paper contributes to the discussion on separate accounting versus formula apportionment in the corporate income taxation of multinational enterprises the innovation is that we consider a general equilibrium tax competition model with an endogenous interest rate in contrast to previous studies we show that tax rates are inefficiently low not only under separate accounting but also under formula apportionment moreover we identify a wide range of empirically relevant cases where formula apportionment is superior to separate accounting independent of the magnitude of the concealment cost of profit shifting the reason for the change in results is that one country s tax rate affects other countries additionally via changes in the interest rate

long term diversification paths and energy transitions in europe the concentration of the energy mixes of eight european countries is measured latecomers historically enjoyed lower levels of concentration in their energy mixes early comers followed an inverted u path of concentration latecomers a u path a time effect and size effect explains the different patterns small energy consuming countries will be able to do faster transitions

the general equilibrium effects of the residential property tax incidence and excess burden abstract an urban general equilibrium model is used to explore the efficiency effects and distributional consequences of the residential property tax in a model of a small open city the replacement of a nondistortionary land tax with the residential property tax reduces the land area density and population of the city the aggregate net return on land falls by an amount equal to 164 93 of total tax revenue in a model of a closed region when city q replaces the land tax with the residential property tax production and employment shift to other cities in the region the net return on land decreases in city q and increases in other cities in the region in aggregate landowners are made better off by the change in tax policy while residents are made worse off the excess burden of the property tax is computed as 6 5197 of tax revenue

political competition and renewable energy transitions over long time horizons a dynamic approach abstract climate change mitigation requires sustainable energy transitions but their political dynamics are poorly understood this article presents a general dynamic model of renewable energy policy with long time horizons endogenous electoral competition and techno political path dependence we calibrate the model with data on the economics of contemporary renewable energy technologies in doing so we discover transition dynamics not present in economy energy models which ignore politics or in formal political economy models which ignore long term technological dynamics we show that the largest effects of partisan ideology on policy occur when the competing parties disagree on the importance of energy policy in these cases the less ideological party appeases the more ideological one while the more ideological party attempts to appease the electorate the results demonstrate that political dynamics could have large effects on the development of renewable energy and carbon dioxide emissions over time influencing the ability of countries to reach various climate mitigation trajectories

ricardo s early treatment of profitability reply to hollander and prendergast i will deal first with professor hollander s objection to my reading of ricardo s letter to malthus of i i august i8i4 and with his startling claim to have readily accept ed the corn calculation in ricardo s correspondence of i8i4 i986 p iq99 the passage from the letter in question begins individuals do not estimate their profits by the material production but nations invariably do works vi p i2i in my article i984 p 737 i took this as a response to malthus s point that in no case of production is the produce exactly of the same nature as the capital advanced consequently we can never properly refer to a material rate of produce works vi p i i 7 the salient features of ricardo s reply are first that he does not mention let alone defend the assumption of capital product homogeneity which casts doubt on sraffa s interpretation works i p xxxi and secondly that he does defend the measurement of profits the net social surplus in material terms hollander complains that the passage from ricardo in fact says nothing about the profit rate or profit share i986 p 4 his emphasis this is true and instead of drawing the inference that any previous reference by ricardo to a material rate of produce was based on the representation of the profit share in physical terms i984 p 737 emphasis added i should have said simply profit or net surplus this does not make a fundamental difference to my interpretation hollander also underlines my observation that ricardo did not restrict the material estimation of profits to the agricultural sector but ricardo s argument that nations invariably estimate profit in material terms can be read as a justification for using the technique in a more unusual context specifically in the treatment of agriculture which was after all the sector to which malthus was apparently referring when he made his objection about the material rate of produce works vi pp i i 7 8 i therefore stand by my interpretation or tortuous meandering as professor hollander so colourfully describes it i986 p i093 which brings me to the readily accept ed corn calculation that hollander would put in its place until hollander i983 the textual basis for attributing the calculation was confined to ricardo s letter of 25 july i 8 i 4 works vi pp i i 4 5 leaving aside temporarily the validity of this evidence it is relevant to consider hollander s reaction s to his discovery in hollander i973 the calculation is described as a rather casual and

current challenges of germany s energy transition project and competing strategies of challengers and incumbents the case of direct marketing of electricity from renewable energy sources electricity generated by renewable energies res e already accounts for 25 of germany s electricity supply this has led to recent discussions for a better market integration of res e the paper examines how competing actors and their ideas on market integration developed new services for direct marketing according to their respective origins and tried to shape the regulatory framework the paper analyses this process and explains the current shape of the field of direct marketing medium sized structured actors who favoured res e integration via the conventional wholesale power markets and who formed early close coalitions with res e power producers at the same time have been most successful in terms of market shares moreover they have been very successful for different reasons in building up coalitions with governance units and influencing the field rules and routines based on those findings the paper will conclude with some policy advices for the future adjustment of the current regulative frameworks as long as there is no evidence of how res e can be integrated most effectively and efficiently policies should maintain a competition between different direct marketing strategies to find out which strategies serve the best in terms of achieving a successful energy transition

the ricardo debates hollander and garegnani on natural price and output determination samuel hollander and pierangelo garegnani have debated the appropriate interpretation of david ricardo since 1973 without substantive agreement on at least one issue the interdependence of prices and output levels the debate has stalled because textual exegesis cannot solve a logical problem this paper demonstrates that such interdependence exists unless one makes one of two restrictive and un ricardian assumptions either output levels must be insensitive to wage rate changes or all industries must be subject to constant costs

on interpreting ricardo a reply to sraffians this paper seeks to clarify and defend aspects of the interpretation advanced in interpreting ricardo terry peach 1993 in the light of published criticisms by writers of a sraffian persuasion the principal areas of discussion include the corn model interpretation the labor theory of value and the invariable measure of value and the ricardo sraffa relationship copyright 1998 by oxford university press

robert torrens and ricardo s corn ratio theory of profits the main point at issue in the dispute started more than ten years ago by s hollander on sraffa s interpretation of ricardo s early theory of profits undoubtedly concerns the logic underlying the notion which ricardo entertained at that stage namely that it is the profits of the farmer which regulate the profits of all other trades ricardo to trower 5 march 1814 in ricardo 1951 73 vi p 104 as is well known the rational foundation for such statements by ricardo was according to sraffa that in agriculture the same commodity namely corn forms both the capital and the product therefore in agriculture the rate of profit is determined as a ratio between two quantities of corn without any question of valuation if there is to be a uniform rate of profit in all trades it is the exchangeable values of the product of other trades relatively to corn that must be so adjusted as to yield the same rate of profit as has been established in the growing of corn sraffa 1951 p xxxi hollander writes that it does not seem likely that ricardo intended to ascribe a determining role to the agricultural sector on the logic ascribed to him by sraffa 1979 p 146 it is remarkable that hollander concedes even more than is necessary for sraffa s case when he writes of his ricardo s assumption in the essay that corn alone enters the wage basket ibid he seems however to reconcile this with his general position by suggesting that the essay on profits constitutes an essay in persuasion p 118 and its policy orientation would justify ricardo s emphasis upon corn in the wage basket to get the message across regarding the effects of corn import restriction no general theoretical significance ought to be attached to such strong cases hollander 1979 p 146 i shall not deal here with the difficulties that hollander s reconstruction of what ricardo intended encounters on grounds of both logic and evidence for this see eatwell 1975 garegnani 1982 the purpose of the present note is to show that the logic which sraffa ascribes to ricardo is clearly spelled out in the second edition of torrens external corn trade 1820 where we find both the determination of the agri cultural rate of profit in physical terms as a ratio between two quantities of corn and the determination of the value of manufactured goods relative to corn using the given agricultural rate of profit remarkably in this work torrens goes out of his way to acknowledge his great indebtedness to ricardo s original and profound inquiry into the

hedonic prices and cost benefit analysis abstract hedonic prices have been used to evaluate the willingness to pay for attributes we reformulate the notion of hedonic price from a composite price on housing to a unit price on traded quantities in conformity with long run competitive equilibrium theory this formulation was suggested but not developed by rosen j polit econ 82 no 1 1974 34 35 by first characterizing an efficient allocation of consumers to space we show that hedonic unit prices can be understood as a bid rent function which supports the efficient allocation this is despite the fact that the lots over which consumers bid are themselves endogenous we show that unit hedonic prices reveal preferences in a manner different from composite hedonic expenditures

the taxation of financial capital under asymmetric information and the tax competition paradox information sharing between governments is examined in an optimal taxation framework we introduce a taxonomy of alternative systems of international capital income taxation and characterize the choice of tax rates and information exchange the model reproduces the conclusion found in earlier literature that integration of international caopital markets may lead to the under provision of publicly provided goods however in contrast to previous results in the literature under provision occurs due to inefficiently coordinated expectations we show that there exists a second equilibrium with an efficient level of public good provision as well as complete and voluntary information exchange between national tax authorities

a three input model of the spatial effects of a central city wage tax abstract this paper considers the short run and long run spatial effects on wages employment and business capital as functions of location of a localized increase in wage tax rates the model is most applicable to a central city that has a higher wage tax rate than the surrounding suburbs the inclusion of land as a third input in production significantly reduces the long run effects of a central city wage tax on employment near the central city boundary as compared with a model in which labor and capital are the only two inputs the short run effects are significantly less than the long run effects