risk taking and taxation an alternative perspective abstract the analysis of risk taking and taxation has almost invariably been in a portfolio choice framework this paper presents the alternative perspective of an occupational choice framework where risk taking involves the additional element of discrete choice between safe and risky activities it is shown that the specification of equilibrium must of necessity have a general equilibrium character in this setting the paper develops rules for government intervention in the market equilibrium and analyses the effects of taxation on risk taking

growth and profitability of small and medium sized enterprises some welsh evidence foreman peck j makepeace g and morgan b 2006 growth and profitability of small and medium sized enterprises some welsh evidence regional studies 40 307 319 policy makers throughout the organization for economic co operation and development oecd are keen to promote the development of small and medium sized enterprises smes by a wide variety of means the present study of over 1600 welsh smes casts doubt on the effectiveness of doing so by grants by encouraging trade associations by pursuing current initiatives in training or by stimulating innovation as defined by sme management on the other hand it finds that support for selective information technology investment and for marketing planning could be beneficial additional results that might be addressed by policy are short termism by older managers preferring current to future profits more than younger managers signs that fixed costs of tax compliance bear substantially more heavily on the profitability of smaller smes and evidence

the behavior of prices in the nikkei spot and futures market abstract we examine the relation between the prices of japanese stocks traded on the tokyo stock exchange tse as reflected in the nikkei stock average nsa stock index and the prices of the nsa futures contract traded on the singapore international monetary exchange simex since the inception of trading in september 1986 the nsa futures contract has generally sold at a discount relative to its theoretical value trading restrictions and transaction costs may explain some of this mispricing which has been declining over time as in the u s markets

market trading structures and asset pricing evidence from the treasury bill markets earlier studies report signfficant price disparities betweenfutures andforward or spot markets examining the treasury bill markets this article demonstrates that differences in market trading structures explain these disparities treasury billfutures rates contain significantly lower liquidity and default premia than do syntheticforward rates this reflects the functioning of a futures clearing association and differences between an open outcry auction futures market and an over the counter dealer spot market the same factors that make futures contracts nonredundant securities also explain the existence in equilibrium of price disparities

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

did migration in the 1980s narrow the north south divide this paper integrates empirical analysis of the decision to migrate from a region with that of destination choice thus we are able to study how net migration and not just gross outflows are influenced by regional labour market circumstances the results suggest that relative regional wages rates but not relative unemployment and vacancy rates are effective in reallocating labour from regions experiencing adverse demand shocks we find little evidence that manual labour is migrating from those regions with relatively high manual unemployment but that migration plays a more conventional role in the regional adjustment process for non manual workers

migration regional equilibrium and the estimation of compensating differentials in this study we have developed an improved model of net migration that encompasses both equilibrium and disequilibrium components instrumental variables fixed effects estimates of the model with time series data for 51 areas in the united states over the period 1971 1988 support the importance of both equilibrium and disequilibrium factors in migration excerpt

inequality and inefficiency in a model of occupational choice with asymmetric information abstract this paper presents a model of an economy with two occupations in which one occupation has access to some private information it is shown that even if all individuals are identical equality of ability and there is free entry into occupations equality of opportunity this may not be sufficient to equalize the rewards to occupations in equilibrium the only equilibrium may be one where one occupation earns more than the other and entry to the lucrative occupation is rationed we extend the analysis to the case of heterogenous individuals where we show that under reasonable assumptions asymmetric information worsens the distribution of income we also look at inefficiencies and show that with asymmetric information it may be the least productive individuals who become managers

macroeconomic imbalances a multiregional general equilibrium analysis this article analyzes regional and sectoral consequences of recent federal budget and trade deficits a multiregional computable general equilibrium mcge model is developed in which regions differ in technology factor endowments tax rates government expenditure patterns and trade relationships an application to virginia and the rest of the united states indicates that traditional sectors agriculture forestry basic wood products mining textiles and apparel bear a greater burden of adjustment to macroeconomic imbalances than do other sectors the analysis demonstrates that seemingly aspatial national policies may shift the geographic distribution of national output and income

manual wage differentials collective bargaining and multi locational firms an analysis using northern ireland nes data harris r 1994 manual wage differentials collective bargaining and multilocational firms an analysis using northern ireland nes data reg studies 28 483 493 a number of studies have appeared in the literature which consider the impact on the wage distribution of for example gender and ethnic differences of union membership or coverage by collective agreements of firm size of belonging to the private vis a vis public sector of being self employed as opposed to an employee another potentially important determinant of wages is whether the firm employing an individual is locally owned or whether it is part of a multiregional or multinational organization which operates branches in various locations this paper sets out to investigate the size of this locational wage differential across all sectors for a region of the uk using a bivariate sample selectivity model where the choice of firm type i e locally owned or externally owned and union coverage are endogenous the results confirm that

a regional general equilibrium model of the united states tax effects on factor movements and regional production a six region general equilibrium model of the united states is used to assess the potential long run effects of state local and federal tax policies on output and the allocation of factors across regions and sectors the nonuniform structure of state local taxes and their interaction with federal taxes means that regional output is affected quite differently than would be projected solely on the basis of changing average regional tax burdens the study provides a useful indication of conceptual and empirical issues that must be considered in further regional modeling efforts issues which do not arise in closed economy national models copyright 1989 by mit press

general equilibrium stock index futures prices theory and empirical evidence we develop a closed form general equilibrium model of stock index futures prices in a continuous time economy with stochastic interest rates and market volatility we show that futures prices implied by the model have very different properties from those of the cost of carry model using nyse stock index futures data we examine the restrictions imposed on futures prices by both the equilibrium and cost of carry models consistent with the equilibrium model we find that stock index futures prices are related to market volatility and that their interest rate sensitivity is a nonlinear function of contract maturity

the quality delivery option in treasury bond futures contracts this paper uses three methods to estimate quality option values for cbot treasury bond futures contracts it presents evidence regarding 1 payoffs from exercising this option at delivery 2 estimates from a t bond futures pricing model that incorporates this option and 3 estimates obtained from an exchange option pricing formula the results indicate that this option is worth considerably less than reported by kane and marcus 1986a for example payoffs obtained by switching from the bond cheapest to deliver three months prior to delivery to the one cheapest at time of delivery average less than 0 30 percentage points of par

stock index futures mispricing profit opportunities or risk premia this paper reports empirical evidence on stock index futures pricing based on about four years of synchronous hourly data from the uk reported index values are based on firm quotes identified arbitrage opportunities are therefore actually exploitable and economically significant the analysis controls for cash market settlement procedures the results show that ex ante trading rules would have generated attractive profits after transaction costs and after the risks of dividend uncertainties marking to market and possible delays in execution are considered the far contract and the near contract tend to be mispriced in the same direction the mild tendency of futures to be overpriced in rising markets and underpriced in falling markets appears to be unimportant finally significant positive relationships are observed between the absolute magnitude of mispricing and time to maturity and between mispricing and index option implied volatility

arbitrage opportunities in the japanese stock and futures markets 1990 arbitrage opportunities in the japanese stock and futures markets financial analysts journal vol 46 no 2 pp 14 24

a comparison between economic systems with an application to transition abstract this paper develops a general equilibrium theory of endogenous firm and class formation under non contractibility with heterogeneous individuals a collectivist economy a private ownership economy and a mixed economy are compared on the basis of identical economic fundamentals methodological symmetry each economic system generates specific inefficiencies so that none dominates the others in general the main trade off is between the welfare loss associated with risk taking in the private ownership economy and the informational problems in the collectivist economy we then use this framework to study the political economy of transition between economic systems and provide detailed welfare results

arbitrage in stock index futures the textbook description of arbitrage suggests that it is a straightforward matter of taking offsetting positions in different securities and realizing the arbitrage profit such descriptions however typically ignore the transaction costs that give rise to the arbitrage opportunity in the first place taking proper account of these transactions costs may considerably complicate the problem particularly when as is usually the case the arbitrage potential is restricted this article is concerned withoptimal arbitrage strategies with transaction costs when the arbitrage potential is restricted by position limits the particular case we shall analyze is the standard and poor s sp the corresponding figure for the s p 500 portfolio for the same period was

a theory of dual labor markets with application to industrial policy discrimination and keynesian unemployment this paper develops a model of dual labor markets based on employers need to motivate workers in order to elicit effort from their workers employers may find it optimal to pay more than the going wage this changes fundamentally the character of labor markets the model is applied to a wide range of labor market phenomena it provides a coherent framework for understanding the claims of industrial policy advocates it also can provide the basis for a theory of occupational segregation and discrimination that will not be eroded by market forces finally the model provides the basis for a theory of involuntary unemployment

regional effects of taxes in canada an applied general equilibrium approach this paper reports on an applied general equilibrium regional model for canada which is used to investigate the regional effects of taxes earlier literature on regional tax effects is reviewed and the main features of the model are briefly described existing literature on regional tax effects is largely non quantitative and does not discuss several important regional features of taxes such as taxes which are predominantly on products or industries located in particular regions results suggest that regional effects of taxes can be significant and in the canadian case at least do not tend to counterbalance one another in general richer regions tend to lose and poorer regions gain from federal taxes but other regional characteristics such as manufacturing non manufacturing or resource non resource can be important this abstract was borrowed from another version of this item

structural funds and the evaluation of community economic development initiatives in the uk a critical perspective armstrong h and wells p 2006 structural funds and the evaluation of community economic development initiatives in the uk a critical perspective regional studies 40 259 272 since their inception within uk structural funds programmes in the 1990s community economic development ced initiatives have experienced a rapid expansion evaluation methods have struggled to adapt to what was a radically new type of policy this paper charts the rise of ced in the uk s objective 1 and 2 programmes and it examines the main problems posed by ced for structural funds monitoring and evaluation whilst progress in adapting the monitoring and evaluation methods to ced has been good a number of key challenges remain to be faced by the eventual ex post evaluations of the 2000 06 programmes and for the 2007 13 programming period the key challenges are identified and possible ways forward are discussed community economic development structural funds evaluation uk programmes armstrong h et wells p 2006 les

short sale restrictions implications for stock index arbitrage abstract this paper offers a study of relevant transaction costs when examining the efficiency of stock index futures markets we suggest that a different transaction cost estimate should be used when testing the upper side of the cost of carry model than when testing the lower side of the model empirical evidence indicates that this explains most of the underpricing observed in the finnish stock index futures market

index futures arbitrage and the behavior of stock index futures prices this article examines intraday transaction datafor s p 500 stock indexfutures prices and the intraday quotes for the underlying index the data indicate that thefutures price changes are uncorrelated and that the variability of these price changes exceeds the variability ofprice changes in the s p 500 index this excess variability of the futures over the index remains even after controlling for the nonsynchronous prices in the index quotes which induces autocorrelation in the index changes we advance and examine empirically two hypotheses regarding the difference between the futures price and its theoretical value that this mispricing increases on average with maturity and that it is path dependent evidence supporting these hypotheses is presented

the information requirements for an effective regional policy a critique of the allsopp report this paper considers the recommendations of the allsopp review on the adequacy of uk regional economic statistics it raises general concerns over the philosophy underpinning the review and specific questions as to whether the review s recommendations are sufficient to operate effectively the present uk regional policy regime in particular the institutional arrangements that make up the new localism in uk regional policy have data requirements that are more extensive than simply monitoring performance against government targets many of these in formational requirements were simply not considered or were given an inappropriately low weight in the review s deliberations

entrepreneurial risk taking inequality and public policy an application of inequality decomposition analysis to the general equilibrium effects of progressive taxation the objective of this paper is to investigate the conventional wisdom that there is a policy conflict between the reduction of inequality and the encouragement of entrepreneurial risk taking the paper attempts to provide a precise statement of this conflict in the context of the progressivity of tax regimes using the method of inequality decomposition analysis a taxonomy is developed which locates the sources of the policy conflict in a precise fashion a detailed analysis then shows that the conventional wisdom is misleading if not wrong and that in many cases the claimed policy conflict is quite simply illusory

devolving fiscal policy migration and tax yields abstractdevolution of taxes to sub national jurisdictions could reduce expected tax revenue if some households move to lower tax regimes constraining devolved government policy this paper develop

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

implicit labor contracts and free entry the model investigated here is an adaptation of the free entry model introduced in kihlstrom laffont 1979 in that model the only labor market is one in which employers pay workers an ex ante guaranteed wage in the model of this paper there is also a spot market for labor in the earlier sections of the paper the existence of the equilibrium is established and its efficiency is investigated in this analysis it is assumed that all individuals are identical in the later sections we drop this assumption and investigate conditions under which employers are more risk averse than workers

an econometric model of merseyside validation and policy simulations minford p stoney p riley j and webb b 1994 an econometric model of merseyside validation and policy simulations reg studies 28 563 576 the paper estimates an econometric model of merseyside on annual data the model is derived from a heckscher ohlin framework for the traded sector set beside a non traded sector and facing a positively sloped supply curve of manual labour whose reservation wage is set by unemployment benefits with all other factor prices being set exogenously to the region through elastic supply the supply of manual labour responding to traded sector wages set by world market conditions determines the size of the region s output the model s fit over the past is acceptable though data is limited its simulation properties contrasting with those of previous demand driven models imply high returns to policies that reduce local costs such as taxes union mark ups and transport charges minford p stoney p riley j et webb b 1994 un modele econometrique de merseyside

a measurement of the extent of market imperfections between markets and applications traditionally market imperfections are measured separately in dealing with the impacts of market imperfections on a financial theory financial researchers often modify the theory by incorporating one type of market imperfections into the theory one by one and then derive a new modified formula the major problem with this approach is that when considering a type of market imperfections the new modified formula still ignores the effects of other types of market imperfections another problem is that the modified formula is often tedious following the concept of degree of market imperfection in hsu and wang 2004 this article aims to derive a more easy measurement of market imperfections between markets discuss some useful applications and provide one of empirical tests the degree of market imperfection between markets can be applied at least to the following areas 1 theoretical model building for pricing derivatives in imperfect markets 2 predicting the deviations of the actual derivative

the dynamics of u s internal migration in this paper we have theoretically derived a net migration equation and estimated it using time series data for 51 u s regions over the period 1971 1988 the results indicate that the dynamic response of net migration is stable and is significantly related to stock equilibrium changes induced by amenity differentials relative employment opportunities relative real wages and industry composition excerpt