the impact of population on co2 emissions evidence from european countries this paper analyses the impact of population growth on co2 emissions in european union countries traditionally researchers have assumed a unitary elasticity of emissions with respect to population growth in this study population is treated as a predictor in the model instead of being included as part of the dependent variable per capita emissions thus relaxing the above mentioned assumption of unitary elasticity we also contribute to the existing literature by taking into account the presence of heterogeneity in the sample and considering a dynamic specification the sample covers the period 1975 1999 for the current european union members our results show that the impact of population growth on emissions is more than proportional for recent accession countries whereas for old eu members the elasticity is lower than unity and non significant when the properties of the time series and the dynamics are correctly specified the different impact of population change on co2 emissions for the current eu members should therefore be taken into account in future discussions of climate change policies within the eu

minimum wage competition between local governments in china abstractthe theory of fiscal and regulatory competition between jurisdictions is more advanced than its empirical testing this is particularly true of labour regulation in general and minimum wag

environmental taxation in open economies unilateralism or partial harmonization there are two reasons why countries might set weak environmental policies transboundary pollution and concerns for competitiveness this article explores the full interactions between these two features within a unified general equilibrium framework first we show that competitive concerns change the structure of output taxes but not that of emission taxes they lead to a lowering of output taxes lower polluting good prices an increase in emission taxes adoption of less or same polluting technologies increased aggregate emissions and lower overall welfare levels second we show that partially harmonizing commodity taxes above their unrestricted nash equilibrium value can potentially hurt as well as improve the pollution technology overall quality of the environment and welfare the three attributes move positively together on the other hand harmonizing of emission taxes above their nash equilibrium values appear to always lead to improvements in the environment and welfare via adoption of cleaner technologies

monetary aggregates and liquidity in a neo wicksellian framework woodford 2003 describes a popular class of neo wicksellian models in which monetary policy is characterized by an interest rate rule and the money market and financial institutions are typically not even modeled critics contend that these models are incomplete and unsuitable for monetary policy evaluation our banks and bonds model starts with a standard neo wicksellian model and then adds banks and a role for bonds in the liquidity management of households and banks the banks and bonds model gives a more complete description of the economy but the neo wicksellian model has the virtue of simplicity our purpose here is to see if the neo wicksellian model gives a reasonably accurate account of macroeconomic behavior in the more complete banks and bonds model we do this by comparing the models second moments variance decompositions and impulse response functions we also study the role of monetary aggregates in predicting inflation in the two models

climate change heterogeneities and stability of international fiscal harmonization this paper analyzes the instability introduced into multilateral agreements by two types of heterogeneity heterogeneity of countries size and number of producing members and heterogeneity of lobbies asymmetric influence at the national versus the international level the work extends theoretical prospective analyses on environmental taxation as illustrated by the harmonization of fuel taxes we show that the acceptability of the tax set at the multilateral level depends on the type of coalitions that participate in the multilateral negotiation size and number of producing countries and the asymmetry in the local state level power of lobbies during negotiations

markov switching causality and the money output relationship the causal link between monetary variables and output is one of the most studied issues in macroeconomics one puzzle from this literature is that the results of causality tests appear to be sensitive with respect to the sample period that one considers as a way of overcoming this difficulty we propose a method for analysing granger causality which is based on a vector autoregressive model with time varying parameters we model parameter time variation so as to reflect changes in granger causality and assume that these changes are stochastic and governed by an unobservable markov chain when applied to us data our methodology allows us to reconcile previous puzzling differences in the outcome of conventional tests for money output causality

does market based electricity price affect china s energy efficiency abstract china is in a critical period of market oriented reform and energy transition as a crucial means to regulate supply and demand under the market oriented mechanism the electricity price can promote the development of energy efficiency by optimizing resource allocation with the gradual increase in electricity consumption the influence of its price on energy consumption is also gradually enhanced therefore this paper evaluated the process of electricity price marketization and conducted a spatial temporal comparative analysis of the effect of electricity price on energy efficiency by controlling economic policy and other price factors the results show that 1 the marketization degree of china s electricity price has improved with steady steps 2 market oriented electricity price has a stable positive correlation with energy efficiency in both the short and long term 3 marketization improves the promotion effect of electricity price on energy efficiency and the influence of electricity price is more significant in the eastern region with a high degree of marketization and the subsequent stage 4 the impact of market oriented electricity price on energy efficiency is asymmetric the impulse response under positive and negative shock is opposite and under the positive shock the response time is longer and the degree is greater

time frequency characterization of the u s financial cycle despite an increase in research motivated by the global financial crisis of 2007 08 empirical studies on the financial cycle are rare compared to those on the business cycle this paper adds some new evidence to this scarce literature by using a different empirical methodology wavelet analysis to extract financial cycles from the data our results confirm that the u s financial cycle is much longer than the business cycle but we do not find strong evidence supporting the view that the financial cycle has lengthened during the great moderation period

second best taxation of emissions and polluting goods abstract this paper studies the problem of the design of an integrated system of second best emission and output taxes in a model where production costs are negatively correlated with their emissions it shows that i the first best pigouvian rule of equating the marginal private benefit of emissions in production to the marginal social damage of emissions must be modified in the second best ii implementation of the modified pigouvian rule requires all firms to face the same marginal emission tax equal to the marginal social damage of emissions plus an adjustment term reflecting optimal tax objectives iii it may not be necessary to directly tax the polluting goods the latter taxes can be subsumed in the emission tax function iv output taxes must be set solely on the basis of optimal tax objectives no pigouvian adjustment is required v if emission taxes are restricted to be proportional and commodity taxes are constrained the modified pigouvian rule will no longer be optimal vi if preferences are weakly separable in emissions and other goods the pigouvian rule remains valid the marginal emission tax is pigouvian and emission and commodity tax instruments can be set separately to address different objectives a proportional emission tax corrects for externalities while commodity taxes are determined solely on the basis of optimal tax considerations

tax principles and tax harmonization under imperfect competition a cautionary example this paper shows that under imperfect competition the welfare effects of indirect tax harmonization may depend crucially on whether taxes are levied by the destination or the origin principle in a standard model of imperfect competition while harmonization always makes at least one country better off and may be pareto improving when taxes are levied under the destination principle which currently applies in the european union harmonization of origin based taxes as recently proposed by the european commission is certain to be pareto worsening when the preferences in the two countries are identical and is likely to be so even when they differ

a theory of interregional tax competition a general equilibrium model is constructed to study tax competition where local governments compete for capital by holding down property tax rates and public expenditure levels an exact definition of tax competition is provided and both the existence and nonexistence of tax competition are shown to be theoretically possible it is argued however that tax competition must occur under empirically reasonable conditions inefficiency in public production is also explicitly modeled the amount of capital used to produce a given level of public service output is shown to be greater than that which is required to minimize costs evaluated at the prices facing private firms

does money matter in shaping domestic business cycles an international investigation we study the contribution of money to business cycle uctuations in the us the uk japan and the euro area using a small scale structural monetary business cycle model constrained likelihood based estimates of the parameters are provided and time instabilities analyzed real balances are statistically important for output and in ation uctuations their contribution changes over time models giving money no role provide a distorted representation of the sources of cyclical uctuations of the transmission of shocks and of the events of the last 40 years

reconsidering the role of money for output prices and interest rates abstract new keynesian models of monetary policy downplay the role of monetary aggregates in the sense that the level of output prices and interest rates can be determined without knowledge of the quantity of money this paper evaluates the empirical validity of this prediction by studying the effects of shocks to monetary aggregates using a vector autoregression var shocks to monetary aggregates are identified by the restrictions suggested by new keynesian monetary models contrary to the theoretical predictions shocks to broad monetary aggregates have substantial and persistent effects on output prices and interest rates

value added taxation in the ec after 1992 abstract this paper examines the quantitative effects of the transitional system of value added taxation for intra ec trade between 1993 and 1997 as recently adopted by the ecofin council first the administration of the current destination principle and the interim solution are described a short representation of the empirical general equilibrium model featuring seven ec regions and 14 production sectors follows finally the effects of a switch to the transitional system are evaluated by using numerical simulations the adopted provisions with regard to cross frontier sales to final consumers open tax arbitrage possibilities which favour low tax countries at the cost of their ec partners when decomposing welfare effects international tax revenue shifts prove to dominate while substitution effects have relatively little influence on economic welfare

think locally act locally spillovers spillbacks and efficient decentralized policymaking we analyze models with interjurisdictional spillovers among heterogeneous jurisdictions such as co 2 emissions that affect the global environment each jurisdiction s emissions depend upon the local stock of capital which is interjurisdictionally mobile and subject to local taxation in important cases decentralized policymaking leads to efficient resource allocation even in the complete absence of corrective interventions by higher level governments or coordination of policy through coasian bargaining in particular even when the preferences and production technologies differ among the agents the decentralized system can result in globally efficient allocation

environmental taxation tax competition and harmonization abstract this paper studies the tax competition problem in the presence of transboundary pollution it shows that economic integration causes the firms to adopt the same or less polluting technologies but it nevertheless increases aggregate emissions and lowers welfare second the paper examines the ramifications of partial tax harmonization policies it shows that harmonizing commodity taxes above their unrestricted nash equilibrium value may either increase or lower the equilibrium emission tax under the former firms opt for less polluting technologies aggregate emissions decrease and welfare improves on the other hand if emission tax goes down firms will choose more polluting technologies aggregate emissions will increase and welfare deteriorates finally harmonizing the emission tax above its unrestricted nash equilibrium value which leads the firms to adopt a less polluting technology also causes aggregate emissions to decline and overall welfare to increase

should tax policy favor high or low productivity firms heterogeneous firm productivity raises the question of whether governments should pursue pick the winner strategies by subsidizing highly productive firms more or taxing them less than their less productive counterparts we study this issue in a setting where governments can set differentiated effective tax rates in an oligopolistic industry in which firms with two productivity levels co exist we show that the optimal structure of tax differentiation depends critically on the feasible level of the corporate profit tax which in turn depends on the degree of international tax competition when tax competition is weak and optimal profit tax rates are high favoring high productivity firms is indeed the optimal policy when tax competition is aggressive and profit taxes are low however the optimal tax policy reverses and favors low productivity firms

domestic tax reform and international oligopoly abstract this paper examines the strategic use of domestic tax instruments and the welfare effects of multilateral domestic tax reform in a model of international cournot oligopoly the welfare effects of commodity tax harmonization appropriately defined are precisely as in the competitive case it is always potentially pareto improving and starting from the nash equilibrium in tax rates is pareto improving without any need for compensation a mutual reduction of production subsidies benefits the efficient low marginal cost country and harms the inefficient despite the pre existing monopoly distortion the effect on global efficiency is ambiguous

does higher government debt link to higher social expenditure new method new evidence abstractscholars believe that higher social expenditures are usually linked with higher government debts whereas higher debts reduce social expenditures however it is reasonable to speculate that higher government debt may contribute to higher social spending while fiscal deficits occur during a recession which commonly creates greater demand for social expenditure for a deeper investigation this paper revisits the dynamic relationship between social spending and public debts in the time frequency domain using the novel wavelet coherency analysis as well as the phase difference technique to derive the co moved and causal relationships between social spending and public debts in 13 oecd countries the evidence identifies a dynamic relationship between variables while higher social expenditures increase government debts the shocks from government debts to social expenditures are conversely uncertain we discover that higher government debt does reduce social expenditures but it may be linked to h

the rebound effect for heavy industry empirical evidence from china abstract energy efficiency improvement will reduce the effective price of energy services and hence at least partially mitigate original expected energy conservation therefore the magnitude of rebound effect is important for the design and timing of an effective energy conservation policy under the framework of translog cost share equations we estimates the direct rebound effect for heavy industry in china for the first time by conducting an empirical research on the relationship between the direct rebound effect and the ease with which energy services can substitute for other inputs additionally asymmetric price responses are specified in the model for the rebound effect estimation empirical results in our paper indicate that the rebound effect for heavy industry in china is about 74 3 this reveals that energy efficiency improvement can save energy to a certain degree since the rebound effect is less than 100 back fire but most of the expected reduction in heavy industry energy consumption is mitigated these findings prove that energy pricing reforms and energy taxes should be further implemented to achieve effective energy conservation in china s 12th five years plan

optimal policies with an informal sector abstract this paper characterizes optimal policies in the presence of tax evasion and undocumented workers in equilibrium domestic workers may work exclusively in the formal sector or also in the informal sector surprisingly in equilibrium wages are always equalized between domestic and undocumented workers even if they do not work in the same sectors of the economy this is driven by the interaction of firm level decisions with optimal government policy we also find that enforcement may not always be decreasing in its cost and that governments will optimally enforce labour market segmentation if enforcement costs are not too high

a general theorem on tariff harmonization abstract this paper proves a general theorem on welfare improving tariff changes that a tariff harmonization towards any arbitrary common target tariff rates among member countries can improve potential world welfare as long as international lump sum transfers are available

environmental expenditure spillovers evidence from an estimated multi area dsge model abstract this article constructs and estimates a multi area dynamic stochastic general equilibrium model with a spatial simultaneous equation taking beijing tianjin hebei region in china as an example we explain the dynamic effect of environmental expenditure shock and its spillover effects environmental expenditure has an obvious crowding out effect on consumption and investment in local area but has some positive influences on the economy of external regions over the business cycle environmental expenditure shock in local area can well explain the volatility of real output and social investment in the last 52 quarters however environmental expenditure shocks in external regions have little contribution to the volatility of output and investment in local area one interesting result is that the contribution of environmental expenditure shocks in external regions to the trend of pollution fluctuation is greater than that in local area

money does granger cause output in the bivariate money output relation abstract a bivariate granger causality test on money and output finds statistically significant causality when data are measured in log levels but not when they are measured in first differences of the logs bootstrap simulation experiments indicate that most probably the first difference results reflect lack of power whereas the level results reflect granger causality that is actually in the data the reason for the lack of power in the first difference f statistic is that first differencing the data appears to entail a specification error by showing that money does granger cause output in the bivariate relation we remove a potential embarrassment for models that assign an important role to money in business fluctuations

interjurisdictional capital mobility fiscal externality and a corrective subsidy abstract recent studies emphasize that local property taxation may result in inefficiently small amounts of local public spending this paper shows that the inefficiency can be traced to a fiscal externality when one jurisdiction increases its taxes it causes a flow of capital to other jurisdictions that increases their tax revenues the inefficiency can be corrected with a subsidy that internalizes the externality key empirical parameters determining the magnitude of the externality are identified illustrative calculations indicate that subsidy rates on the order of 40 might be required to achieve efficiency

can partial fiscal coordination be welfare worsening a model of tax competition most work on tax competition argues that mobile factors tend to be undertaxed except if there is coordination of tax policies full coordination is not however always feasible and as a consequence some measures of partial coordination have been proposed such as minimal withholding taxes on interest income we show that partial coordination can be in some instances welfare worsening and that then no coordination is to be preferred

does energy price regulation benefit china s economy and environment evidence from energy price distortions abstract china s energy prices have long been regulated due to the critical role energy plays in economic growth and social development which leads to energy price distortion to some extent to figure out whether energy price regulations will benefit china s economy measured by gdp growth and environment measured by carbon emissions we conducted an in depth simulation using path analysis where five energy products natural gas gasoline fuel oil steam coal and coking coal are selected and three measurements absolute relative and moving of energy price distortions are calculated the results indicate that with a series of energy pricing policies the price distortion for a single type of energy has gradually transformed while the energy pricing system in china is not fully market oriented yet furthermore china s economy benefits from relative and moving distortions while the absolute distortions of energy prices have negative impacts on economic growth finally with regard to the environment carbon emissions call for fewer distortions

tax harmonization and tax competition in the european union lessons from switzerland abstract this paper presents empirical evidence on individual income tax competition in switzerland tax competition has some influence on the spread of people with high income over the cantons and it is partly capitalised in dwelling rents however it neither leads to a collapse of public good supply nor makes redistribution by the fiscal authorities impossible thus if tax competition works well in switzerland there is no reason why it should have disastrous effects in a future european union

how population and energy price affect china s environmental pollution abstract this paper examines the impact of population and energy price on china s environmental pollution through both industrial and residential channels our theoretical models reveal that the influences of population on environmental pollution are contingent on wage stickiness and wage elasticity we also predict that environment pollution decreases with rising energy price but downward energy price distortion intensifies environmental pollution we test these hypotheses using panel data of 30 chinese provinces from 2001 to 2016 and employing both constant coefficient and time varying coefficient panel data models to conduct analyses our empirical results show that population growth increased urbanization and energy price distortion all intensify environmental pollution while population aging and rising energy price tend to alleviate environmental pollution our results also reveal significant regional and time heterogeneity on the impact of population factors and energy price on china s environmental pollution

welfare effects of changing commodity tax rates toward uniformity abstract this paper presents a theory of tax reform that is applicable to a many good economy where i the initial tax structure is arbitrarily given ii no lump sum tax exists and iii the initial tax revenue must be maintained after the reform sufficient conditions are established under which tax changes definitely result in increases in welfare they indicate that in a wide class of situations the uniform tax structure can be a useful intermediate target on the way to optimum

tax competition and leviathan abstract attitudes towards downward pressure on tax rates from international tax competition depend on attitudes towards government this paper synthesises the two extremes which as in other areas of public finance have dominated the debate typically being presented as stark alternatives the view of government as a leviathan from which tax competition emerges as a useful constraint on policy makers and the view of government as a benevolent maximiser of their citizens welfare from which it emerges as a source of inefficiency conditions are derived under which when policy makers are neither entirely benevolent nor wholly self serving tax coordination benefits the representative citizen

tax evasion fiscal competition and economic integration abstract this paper examines the implications of tax evasion for fiscal competition and tax harmonization policies in an economic union first for symmetric countries it proves that the equilibrium values of the tax and audit rates are less than optimal tax harmonization alone will also lead to a less than optimal audit rate second for asymmetric countries the paper shows that integration may turn an honest country into an evading one it argues that tax harmonization alone may be a bad policy in that it can make both countries worse off it may also cause an otherwise honest country to turn to evasion

the effect of urbanization on co2 emissions in emerging economies the theories of ecological modernization and urban environmental transition both recognize that urbanization can have positive and negative impacts on the natural environment with the net effect being hard to determine a priori this study uses recently developed panel regression techniques that allow for heterogeneous slope coefficients and cross section dependence to model the impact that urbanization has on co2 emissions for a panel of emerging economies the estimated contemporaneous coefficients on the energy intensity and affluence variables are positive statistically significant and fairly similar across different estimation techniques by comparison the estimated contemporaneous coefficient on the urbanization variable is sensitive to the estimation technique in most specifications the estimated coefficient on the urbanization variable is positive but statistically insignificant the implications of these results for sustainable development policy are discussed

formula apportionment vs separate accounting a private information perspective abstract in 2002 the european commission recommended that member countries use formula apportionment procedures to tax multinational companies this departure from the standard separate accounting transfer pricing approach is an attempt to reduce the costs and distortions associated with auditing transfer prices unfortunately apportionment formulas create their own economic distortions and contrary to popular belief they do not eliminate distortions due to asymmetric information between the multinational and the national tax authorities in this paper i explicitly model the role of private information in two tax competition games one in which tax liabilities are calculated under formula apportionment and one in which tax liabilities are calculated under separate accounting and transfer prices are audited switching to a formula apportionment system affects the after tax profit of multinationals and the tax revenues paid by both domestic and foreign firms the direction and magnitude of the changes depend on the accuracy of the auditing technology and non monotonically on multinational costs the switch will have different effects on the tax receipts from domestic and foreign firms

reforming an asymmetric union on the virtues of dual tier capital taxation the tax competition for mobile capital in particular the reluctance of small countries to agree on measures of tax coordination has ongoing political and economic fallouts within europe we analyse the effects of introducing a two tier structure of capital taxation where the asymmetric member states of a union choose a common federal tax rate in the first stage and then non cooperatively set local tax rates in the second stage we show that this mechanism effectively reduces competition for mobile capital between the members of the union moreover it distributes the gains across the heterogeneous states in a way that yields a strict pareto improvement over a one tier system of purely local tax choices we also discuss the effects of diverging capital endowments within the union and capital flows to third countries

the welfare consequences of pollution tax harmonization a key and often controversial issue in environmental negotiations is the appropriate extent of harmonization of environmental policies this paper within a general equilibrium model of international trade with endogenous pollution discharges identifies instances in which pollution tax harmonization can deliver potential pareto improvements

fiscal pressure tax competition and environmental pollution as one of the strategies local governments adopt in response to fiscal stress tax competition influences the social optimum level of public goods such as environment this paper aims to investigate the mechanism of regional tax competitions from the perspective of financial stress recently the effect of tax competition on environmental pollution rises gradually existing empirical researches mostly apply a fiscal decentralization based perspective and ignore the spatial correlation between pollution and tax competition under the perspective of financial stress this paper measures the impact of inter regional enterprise income tax competition and value added tax competition on environmental pollution of 30 provinces using empirical analysis and then estimates the direct effect indirect effect and total effect based on it from year 2004 2014 it s been found that inter regional tax competition not only brings negative influence to local environment but also makes the environmental quality become worse in spatial correlation regions these findings are of enlightening politic revelations to further standardize enterprise tax competition among local governments and to promote the sustainable development both in economy and environment

which border taxes origin and destination regimes with fiscal competition in output and emission taxes abstract this paper posits a two stage game in tax regime and tax rates to study the property of second best emission and output taxes in a two country world with an atmospheric externality it shows that i either the destination destination or the origin origin tax regime may constitute the subgame perfect nash equilibrium of this game ii either regime may pareto dominate the other iii it is possible to have a prisoner s dilemma game where the origin origin regime pareto dominates but the choice of the destination regime is the dominant strategy for each country other results include iv under origin origin regime the output tax is used for fiscal competition the emission tax is set at a rate equal to the national marginal social damage of emissions and public goods are provided suboptimally v under destination destination regime the output tax is ineffective as an instrument for fiscal competition the emission tax is used not only for combating pollution but also for tax competition the tax is set at a rate below the national marginal social damage of emissions emissions are pushed above their closed economy level the provision of public goods are optimal

eu regional policy and tax competition the european union eu provides coordination and financing of trans european transport infrastructures i e roads and railways which link the eu member states and reduce the cost of transport and mobility this raises the question of whether eu involvement in this area is justified by inefficiencies of national infrastructure policies moreover an often expressed concern is that policies enhancing mobility may boost tax competition we analyze these questions using a model where countries compete for the location of profitable firms we show that a coordination of investment in transport cost reducing infrastructures within union countries enhances welfare and mitigates tax competition in contrast with regard to union periphery infrastructure the union has an interest in a coordinated reduction of investment expenditures here the effects on tax competition are ambiguous our results provide a rationale for eu level regional policy that supports the development of intra union infrastructure

does urbanization lead to less energy use and lower co2 emissions a cross country analysis despite the relationship between urbanization energy use and co2 emissions has been extensively studied in recent years little attention has been paid to differences in development stages or income levels most previous studies have implicitly assumed that the impact of urbanization is homogenous for all countries this assumption can be questionable as there are many characteristic differences among countries of different levels of affluence this paper investigates empirically the effects of urbanization on energy use and co2 emissions with consideration of the different development stages using the stochastic impacts by regression on population affluence and technology stirpat model and a balanced panel dataset of 99 countries over the period 1975 2005 the findings suggest that the impact of urbanization on energy use and emissions varies across the stages of development surprisingly urbanization decreases energy use in the low income group while it increases energy use in the middle and high income groups the impact of urbanization on emissions is positive for all the income groups but it is more pronounced in the middle income group than in the other income groups these novel findings not only help advance the existing literature but also can be of special interest to policy makers and urban planners

assessing co2 emissions in china s commercial sector determinants and reduction strategies abstract the commercial sector is one of the key sectors in china s economic transformation and carbon emissions control this paper applies var and stirpat models to investigate the major influencing factors of co 2 emissions in china s commercial sector over the period 1980 2014 according to the empirical results per capita gdp urbanization and energy structure have positive effects on co 2 emissions while energy intensity has negative effect on co 2 emissions in the long term besides per capita gdp ranks as the most important driving factors of co 2 in china s commercial sector followed by urbanization energy structure and energy intensity in that order this paper argues that reducing energy intensity and improving energy structure are the means to realize co 2 emission reductions in the commercial sector in the short and long term respectively besides this paper forecasts that co 2 emissions in china s commercial sector will be 1942 mt by 2030 which is huge and about half of the co 2 emissions of the european union in 2014 the findings have important implications for policy makers to enact co 2 emission reduction policies

commodity tax competition between member states of a federation equilibrium and efficiency we first describe regional market equilibria whereupon consumers of each region allocate their purchases of private goods between domestic and nondomestic ones according to the structure of relative prices taxes and transportation costs next regional optimal tax levels and public good quantities are derived the tax of the other region being held constant fiscal competition arises from the ability of one region in choosing its tax to alter the tax base of the other

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

unit tax versus ad valorem tax a tax competition model with cross border shopping abstract within the framework of spatial tax competition with cross border shopping we examine the choice of tax method between ad valorem tax and unit specific tax this study shows that governments endogenously choose the ad valorem tax method not because of a classic welfare reason but because it is a good strategy to compete for mobile consumers another key finding is that while governments are committed to the ad valorem tax method the choice leads to inferior outcome tax cutting competition becomes more serious when countries adopt ad valorem tax and competition in ad valorem tax results in smaller tax revenue than competition in unit tax

paternalism and tax competition when consumers make mistakes the government may wish to use paternalistic taxation as a corrective measure we analyse the extent to which tax competition undermines the feasibility of paternalistic taxation we show that the paternalistic component of a tax on a harmful good is reduced when there is cross border shopping but it does not disappear altogether in a model with tax competition between two countries only one of which has a paternalistic objective we show that a minimum tax rate requirement can be pareto improving despite the divergence in policy objectives tax harmonization however reduces welfare in the non paternalistic country

asymmetric tax policy responses in large economies with cross border pollution we build a model of cross border pollution between two large open economies one importing the polluting good and the other exporting it and derive their non cooperative trade and environmental tax policies we show among other things that 1 in response to a bilateral reduction in trade taxes by both countries the former country s optimal policy is to lower its nash emissions tax while the latter s is to raise it and 2 in response to an increase in emissions tax rates by both countries the former country s optimal reaction is to raise its nash import tariff while the latter s is to reduce its nash export tax that is in the present context freer trade leads the exporting country to adopt stricter while the importing country laxer environmental tax policies

the effect of a fiscal squeeze on tax enforcement evidence from a natural experiment in china abstract this paper investigates the impact of the abolition of the agricultural taxes in 2005 across china on county governments incentives for tax enforcement i show that the revenue loss of county governments was largely offset by tougher tax enforcement the incentive for vat enforcement can be weakened however if the county 1 receives a lower share of total vat revenues 2 has a broader vat tax base or 3 has more abundant sources of revenue from land sales these findings suggest that incentives of local governments can be vital to tax enforcement and to the tax capacity of a country

investigating co2 mitigation potentials and the impact of oil price distortion in china s transport sector abstract the transport sector is a major source of oil consumption and co2 emissions in china however due to the regulated pricing mechanism in china the end user oil price cannot reflect real market price and thus oil price distortion exists therefore the main aim of this paper is to study the affecting mechanism of oil price distortion on co2 emission mitigation firstly the level of oil price distortion is evaluated and a dynamic trans log cost function model is built to analyze the substitution relationship among energy products secondly the own price elasticity and cross price elasticity for fuel demand are calculated based on provincial panel data of china s transport sector over 2004 2016 finally co2 mitigation potentials are estimated by removing the impact of oil price distortion results show that 1 there is positive oil price distortion over 2004 2016 2 substitute relationship is observed between oil and coal oil and electricity and the substitution relationship is affected by factor substitution 3 removing oil price distortion will reduce co2 emissions of china s transport sector by 599 million tons in the studying period policies should focus removing the impact of oil price distortion promoting electricity oil substitution and promoting capital energy substitution to mitigate co2 emissions

the impact of urbanization on co2 emissions evidence from developing countries abstract this paper analyzes the impact of urbanization on co2 emissions in developing countries from 1975 to 2003 it contributes to the existing literature by examining the effect of urbanization taking into account dynamics and the presence of heterogeneity in the sample of countries the results show an inverted u shaped relationship between urbanization and co2 emissions indeed the elasticity emission urbanization is positive for low urbanization levels which is in accordance with the higher environmental impact observed in less developed regions among our contributions is the estimation of a semi parametric mixture model that allows for unknown distributional shapes and endogenously classifies countries into homogeneous groups three groups of countries are identified for which urbanization s impact differs considerably for two of the groups a threshold level is identified beyond which the emission urbanization elasticity is negative and further increases in the urbanization rate do not contribute to higher emissions however for the third group only population and affluence but not urbanization contribute to explain emissions the differential impact of urbanization on co2 emissions should therefore be taken into account in future discussions of climate change policies

a guide to wavelets for economists abstract wavelet analysis although used extensively in disciplines such as signal processing engineering medical sciences physics and astronomy has not fully entered the economics discipline yet in this survey article wavelet analysis is introduced in an intuitive manner and the existing economics and finance literature that utilizes wavelets is surveyed and explored extensive examples of exploratory wavelet analysis are given most using canadian us and finnish industrial production data finally potential and possible future applications for wavelet analysis in economics are discussed

the origin principle tax harmonization and public goods abstract this paper takes up two tasks firstly it shows that the conclusion drawn in lucas 2001 lucas v 2001 tax harmonisation and the origin principle economic letters 71 111 115 regarding potential pareto improvement in small open economies needs to be amended secondly in large open economies it verifies that some reasonable conjectures concerning the welfare effects of a particular tax harmonizing reform hold under the origin based tax system when public goods are present

implementing tax coordination abstract this paper investigates whether tax competition can survive under tax coordination when information is private or nonverifiable we focus on a two jurisdiction model where capital can move across borders and where jurisdictions have different public good requirements but are otherwise identical in this setting coordination may call for a second best allocation supported by differentiated tax rates if however coordination must be achieved via a set of common rules that condition tax rates on jurisdictions choices the second best allocation may not be implementable we show that incentive compatibility requirements will generally affect not only the choice of coordinated rates in states where jurisdictions are different but also the choice of harmonized rates in states where jurisdictions have identical preferences for public consumption

estimating the evolution of money s role in the u s monetary business cycle we assess money s role in the post wwii u s business cycle by employing both fixed coefficient and rolling window bayesian estimations of a structural model of the business cycle with money our empirical evidence favors a specification with drifting parameters for money consumption nonseparability and the federal reserve s reaction to nominal money growth the role of money is estimated to have been important during the 1970s and declined afterward the omission of money produces severely distorted impulse response functions relative to the model with money money is found to be important in replicating the u s output volatility during the great inflation

tax competition in a fiscal union with decentralized leadership this paper examines capital tax competition in the presence of an interstate transfer policy without federal commitment lack of commitment implies that local tax policy is chosen prior to federal transfers the paper s main result is that ex post federal policy neutralizes horizontal fiscal externalities insulating tax policy from capital mobility federal policy however introduces a new source of inefficiency unrelated to tax competition specifically ex post transfer payments prove to be equivalent to an interstate revenue sharing system which may render federal intervention in the presence of fiscal externalities welfare deteriorating relative to tax competition

impact of factor price distortions on energy efficiency evidence from provincial level panel data in china abstract the marketization of energy price is not only an important part of factor pricing reforms but also decisive for energy efficiency improvement thus this study aims to measure factor price distortions and estimate their impact on energy efficiency based on an empirical analysis of 30 provinces of china during 2004 2013 using the stochastic frontier analysis framework results yielded three important findings 1 technical efficiency was the highest in eastern china which still remains low at around 0 7980 followed by central china and western china and there were growing gaps among the above areas 2 capital price was relatively high while energy price was relatively low compared with labor price and the relative allocative efficiency of energy got worse over time 3 energy efficiency loss among the three regions showed convergence trends policy implications are summarized as follows 1 measures such as adjusting energy consumption structure and improving production technology and management levels can reverse the trend of declining technical efficiency 2 the process of energy price marketization needs to be accelerated 3 it is necessary to expand the depth and breadth of regional technology diffusion and break the barriers of technology transfer among regions in china

money and output new evidence based on wavelet coherence abstract we reassess the relationship between money and output using quarterly data from the us economy we use several tools based on wavelets the wavelet power transform and the wavelet coherence with which we analyze this relationship in both time and frequency we find evidence of a weaker relationship within the great moderation as well as a stronger relationship during the great recession

tax harmonisation and the origin principle the purpose of this paper is to discuss whether a tax harmonisation based on the origin principle can be actual pareto improvement api and potential pareto improving ppi in the presence of public good provision we show that there are situations in which some tax harmonisation leads to api and ppi in such cases tax harmonisation converges towards the optimal tax and leads to the api for instance in a two country framework if the foreign country has an initial level of distortion higher than the home country around the optimal tax its initial tax rate must be lower higher than home country in order to obtain a ppi c 2001 elsevier science b v all rights reserved

does money still matter for u s output abstract in this note we use an out of sample approach to investigate whether money growth granger causes output growth in the united states we find that after the great moderation the granger causal role of money appears to have vanished completely

do oil spot and futures prices move together abstract this paper investigates the time varying correlation and the causal relationship between crude oil spot and futures prices using a newly developed approach wavelet coherency analysis in time frequency domain first we find evidence of a long run cointegration relationship between oil spot and futures prices moreover the short run causality is more significant in shorter maturity pairs versus longer maturity pairs in the vector error correction framework second the results from wavelet coherency analysis show significant dynamic correlations between variables in the time frequency domain third the illustration of the phase difference series around zero suggests that spot and futures prices contribute to the dynamics of the long run equilibrium fourth and finally we provide reasons for the structural changes in oil prices and also recommend investment strategies corresponding to risk diversification future studies focusing on the behavior of oil prices should consider the characteristics of the time frequency space and lead lag dynamic relationships

pareto improving indirect tax harmonisation abstract indirect tax harmonisation is central to the european commission s proposals for completion of the internal market by 1993 this paper is concerned with the possibility that such tax coordination might be justified on efficiency grounds as a response to tax induced trade distortions necessary and sufficient conditions characterising welfare improving multilateral tax reforms are given and specific forms of harmonisation are shown to be strictly pareto improving without any need for compensation if the initial situation is one in which protectionist tendencies in domestic taxation are sufficiently pronounced

tax evasion and optimal commodity taxation abstract this paper incorporates tax evasion into ramsey s optimal taxation problem it provides i a precise and intuitive characterization of the tradeoff between optimal tax rates and audit probabilities and ii a modified version of the ramsey equation it also proves that in the presence of tax evasion a the well known requirement of proportional reduction in compensated demands b the traditional result on the optimality of uniform taxation when income is exogenous and c the equivalence of wage and uniform commodity taxes are no longer valid

welfare effects of commodity tax harmonisation abstract the european commission is currently seeking a rapid accelaration of the process of commodity tax harmonisation within the european community substantial changes in domestic tax structures are envisaged yet the welfare theoretic basis of the policy has remained obscure this note goes some way towards suggesting a welfare argument for harmonisation as a collective response to tax induced trade distortions intentional or otherwise it is shown that a programme of multilateral domestic tax reform involving convergence towards an appropriately weighted average of pre existing tax structures a kind of harmonisation is potentially pareto improving

interplay between technological innovation and environmental quality formulating the sdg policies for next 11 economies abstract since the inception of sustainable development goals sdgs the next 11 n11 countries are facing difficulties in attaining the sdg objectives as maintaining the environmental quality has been a challenge for them in this study we have revisited the technology policies of these countries and in doing so we have tried to address the problem of environmental degradation while addressing the issues of sustained economic growth clean and affordable energy and quality education in this pursuit we have designed two indices for environmental degradation and technological advancement and then analyzed the association between them following the environmental kuznets curve ekc hypothesis the empirical analysis has been done by ipat framework and by using bootstrapped quantile regression and rolling window heterogeneous panel casualty tests over a period of 1990 2017 following the results obtained from the analysis we have tried to address the objectives of sdg 13 sdg 4 sdg 8 sdg 9 sdg 7 and sdg 10

should countries control international profit shifting we present a fiscal competition model with two policy instruments the level of corporate taxation and the tightness of control of profit shifting by multinational firms mnf we show that a country may optimally decide not to monitor the mnf for two reasons firstly this country becomes an attractive location for mnf activity despite a high corporate tax secondly as the profits of the mnf become mobile the focus of tax competition is shifted taxation then influences both an mnf s location and the place where it declares its profits

jeux sans frontieres tax competition and tax coordination when countries differ in size closer international integration is putting increasing pressure on existing national tax structures this paper uses a simple two country model to address a range of consequent policy concerns focusing particularly on the role of country size differences in size exacerbate the inefficiency from noncooperative behavior harming both countries the smaller country loses from harmonization to any tax rate between those set in the noncooperative equilibrium but both countries gain from the imposition of a minimum tax anywhere in that range the fully optimal response to freer cross border trade however may be to do nothing jel h20 h77

tax competition with parasitic tax havens we develop a tax competition framework in which some jurisdictions called tax havens are parasitic on the revenues of other countries the havens use real resources to help companies camouflage their home country tax avoidance and countries use resources in an attempt to limit the transfer of tax revenues to the havens the equilibrium price for this service depends on the demand and supply for such protection recognizing that taxes on wage income are also evaded we solve for the equilibrium tax rates on mobile capital and immobile labor and we demonstrate that the full or partial elimination of tax havens would improve welfare in non haven countries in part because countries would be induced to increase their tax rates which they have set at inefficiently low levels in an attempt to attract mobile capital we also demonstrate that the smaller countries choose to become tax havens and we show that the abolishment of a sufficiently small number of the relatively large havens leaves all countries better off including the remaining havens

foreign direct investment income and environmental pollution in developing countries panel data analysis of latin america abstract effects of foreign direct investment fdi and income on pollution emissions are examined using time series data from 1980 to 2010 for 14 latin american countries specifically we test the validity of pollution haven hypothesis phh and environmental kuznets curve ekc hypothesis for this region results from panel fixed and random effects models that controlled the effects of physical capital energy human capital population density and unemployment rate indicate the validity of both the phh and ekc hypothesis estimating two separate models for high and low income countries does not alter the findings for the phh however the impacts of human capital on pollution emission are found to be different for the two groups of countries policies that focus on attracting clean and energy efficient industries through fdi have potential to improve environmental health while enhancing economic growth in latin america