the demand for lotto the role of conscious selection this article presents estimates of the elasticity of demand for lottery tickets using time series data in which there is variation in the expected value of a lottery ticket induced by rollovers an important feature of our data is that there are far more rollovers than expected given the lottery design we find strong evidence that individuals do not choose their lottery numbers uniformly from a uniform distribution that is conscious selection we use our estimates to derive the inverse supply function for the industry and this enables us to identify the demand elasticity we find the price elasticity to be close to unity which implies that the operator is revenue maximizing which is the regulator s objective

testing intertemporal budget constraints theory and applications to u s federal budget and current account deficits this paper extends previous tests of intertemporal budget balance and present value relationships by expanding the set of allowable deficit processes and by deriving a testable condition that is sufficient to ensure intertemporal budget balance as long as the expected discount rate is strictly positive using these tests the authors find that both the postwar federal budget deficit process and the process governing accumulation of u s assets by foreigners are consistent with intertemporal budget balance copyright 1991 by ohio state university press

global imbalances and the intertemporal external budget constraint a multicointegration approach abstract this paper analyzes the external solvency of a group of 23 oecd countries for the period 1970 2012 the empirical strategy adopted underlines the increasing importance of the financial channel for the external adjustment as proposed in gourinchas and rey 2007 we unify the traditional approaches to testing for external sustainability considering the stock flow system created by the variables representing the external relationships of an open economy external sustainability is tested using several types of cointegration and multicointegration tests the results obtained point to weak sustainability in the flows analysis whereas some degree of strong sustainability is found for up to six countries in the stock flow approach among these countries we find both non european economies such as japan and new zealand and euro area members especially those with more restricted access to financing in the international markets

the effects of taxation price control and government contracts in oligopoly and monopolistic competition abstract many government contracts with or policies towards oligopolistic sectors essentially involve private firms selling a given proportion or quantity of output to the government at a fixed price p r with the remainder being sold on the open market often this is combined with consumer rationing examples include cement and sugar in india and health housing and defence in many countries the paper investigates the effects of these schemes including sales and excise taxation on prices output and household welfare under oligopoly and monopolistic competition less government control reduced may raise prices and tax shifting can be above or below 100 percent

common trends the government s budget constraint and revenue smoothing abstract the requirement that the government s budget be balanced in present value terms is shown to be equivalent to the condition that government expenditures inclusive of interest tax receipts and seignorage be cointegrated the condition is in fact stronger requiring that the deficit inclusive of interest be stationary stationarity of the net of interest deficit is neither necessary nor sufficient for intertemporal budget balance however it does have implications for barro s tax smoothing hypothesis data for the period 1890 1986 are consistent with intertemporal budget balance but not with tax smoothing

sustainability of current account deficits in india an intertemporal perspective this study examines the sustainability of current account deficits cads and the validity of intertemporal budget constraint ibc in india the long run model is estimated on annual data for the period 1950 1951 to 2009 2010 the optimal single equation and maximum likelihood ml system estimates of the model provide a consistent support for the long run relationship between imports and exports the olsgh estimates provide no support and that ml system estimates a consistent support for cointegration in both the models estimated with one and two structural breaks in level the new cointegration breakdown tests generally suggest that the cointegration prevails from 1951 to 2010 the evidence supporting the cointegration between imports and exports overwhelms the evidence providing a mixed or no support for cointegration the estimates of slope parameter above zero and the dominant support for cointegration between imports and exports vindicate the validity of ibc and the sustainability of cads the shor

the sustainability of government deficits implications of the present value borrowing constraint this paper introduces a new methodology for evaluating the sustainability of fiscal policy the new methodology is distinguished from most existing tests in two important respects first it allows for stochastic real interest rates and second it is both necessary and sufficient results from the application of the new test suggest that recent fiscal policy in the united states has not been sustainable the paper contrasts its findings with those of james d hamilton and marjorie a flavin 1986 copyright 1989 by ohio state university press

a policy response to the e commerce revolution the case of betting taxation in the uk several environmental changes in the 1990s including the introduction of a national lottery the rise of internet gambling and the reduction of trade barriers within the eu induced the uk government to initiate a large scale review of betting duty as a result of this review the government recently announced a significant reduction in betting taxes they also decided to replace the current general betting duty gbd levied as a proportion of betting stakes with a gross profits tax gpt based on the net revenue of bookmakers we examine the economic rationale behind these decisions and demonstrate how these tax changes have broad implications regarding optimal levels of taxation for other sources of government revenue

perspectives on the u s current account deficit and sustainability this essay considers the underpinnings of the large u s current account deficit it then tackles the question of whether the u s current account deficit is sustainable a current account deficit is sustainable at a point in time if neither it nor the associated foreign capital inflows nor the negative net international investment position are large enough to induce significant changes in economic variables such as consumption or investment or interest rates or exchange rates even if the current account deficit is sustainable by this definition today its trajectory could still be creating future risks for the u s and global economy

current account sustainability in the us what did we really know about it abstract we analyze the sustainability of the us current account ca deficit by means of unit root tests first we argue that there are several reasons to believe that the ca may follow a non linear mean reversion behavior under the null of stationarity using a non linear estar model we can reject the null of non stationarity favoring the sustainability hypothesis second we ask whether unit root tests are a useful indicator of sustainability by comparing in sample results for the 1960 2004 period to the developments observed up to the end of 2008 we find that the non linear model outperforms the linear and random walk models in terms of forecast performance the large shocks to the ca observed in the last five years induced a faster speed of mean reversion ensuring the necessary adjustment to meet the inter temporal budget constraint

chapter 11 and asbestos encouraging private enterprise or conspiring to avoid liability this paper explores the american bankruptcy system especially the chapter 11 code which since 1978 has allowed insolvent companies the opportunity to restructure and reorganise with the benefit of court protection from creditors particular attention is focused on asbestos companies such as johns manville which have been among the most consistent and controversial filers for bankruptcy under chapter 11 the history of asbestos and chapter 11 is explored against the backdrop of the burgeoning asbestos crisis caused by increasing mortality and litigation some of the business and ethical issues involved are highlighted by examining in detail a recent bankruptcy federal mogul t n in 2001 that has implications in both britain and america chapter 11 bankruptcy is evaluated particularly in the light of the trend towards similar mechanisms of insolvency in the uk europe and the rest of the world it is concluded that certainly as regards the experience with asbestos chapter 11 offers an inefficient and inequitable method of rehabilitating or rescuing failing businesses

some stabilizing and destabilizing effects of foreign debt accumulation in developing countries abstract recent research indicates that current account imbalances in the three largest industrial countries germany japan and the united states are self correcting a long run equilibrium relationship exists between the cumulated current account which is the net stock of these countries foreign assets or liabilities and other economic factors the situation appears to be different in a sample of 26 developing countries examined here this paper attempts to explain why it examines the effects on the current account of government and government guaranteed foreign debt on the one hand and net foreign liabilities or the cumulated current account deficit on the other while the cumulated current account deficit does generate stabilizing forces possibly through wealth effects large amounts of government and government guaranteed debt create destabilizing effects by stimulating capital flight

the ethics of using chapter xi as a management strategy in the past decade the use of the chapter xi has soared to the detriment of many creditors workers and consumers a good number of cases were not based on imminent insolvency but on firms attempts to avoid litigation claims against them to terminate labor or other contractual obligations or to gain new financing

do remittances facilitate a sustainable current account we examine how workers remittances impact on the current account in doing so we focus on how remittances affect the sustainability rather than the size of current account balances we find that the presence of remittances makes it more likely that exports and imports are cointegrated thereby lending support to current account sustainability furthermore quantile regression analysis suggests that increased remittances are associated with a faster speed of current account adjustment towards long run equilibrium particularly for those countries characterised by already highly persistent current account balances in contrast to a literature that emphasises an adverse dutch disease impact of workers remittances on the real exchange rate in terms of reduced external competitiveness our findings suggest that remittances are actually beneficial to the current account balance

a pareto comparison of ad valorem and unit taxes in noncompetitive environments abstract a literature that began with wicksell 1896 has shown that an ad valorem tax is welfare superior to an equal yield unit tax in both monopoly and oligopoly markets this paper proves a stronger result for any unit tax imposed on a monopoly there exists an ad valorem tax that pareto dominates it that produces larger profit tax revenue and consumer surplus the paper then considers whether this pareto result generalizes to all cournot nash oligopolies the paper shows that pareto dominance holds in such markets whenever the tax level exceeds a critical value that depends on various market parameters

mean reversion of the current account evidence from the panel data unit root test abstract theoretically the modern intertemporal model of current account determination implies the stationarity of the current account however the empirical finding in the literature indicates nonstationary current account balances based on conventional unit root tests applying the panel data unit root test of im pesaran and shin we find support for the mean reverting property of the current account this in turn lends support to the intertemporal approach to the current account the policy implication of our findings is that current account deficits in major industrial countries are sustainable

is the budget deficit too large yes specifically we find that recent spending and taxing policies of the government if continued violate the government s intertemporal budget constraint as a result government spending must be reduced and or tax revenues must be increased these conclusions are based on tests of whether government spending and revenue are cointegrated in addition to examining real spending and revenue we also normalize these variables by real gnp and population for a growing economy these normalized measures are perhaps more pertinent we also test and find support for the hypothesis that deficits have become a problem only in recent years

assessing ricardian equivalence this paper reviews the literature on ricardian equivalence this hypothesis may be interpreted as a generalisation to the short and the long run of the theories which put no weight on the real effects of public policies on aggregate demand we argue that ricardian equivalence relies on both permanent income hypothesis and the fulfilment of the intertemporal government budget constraint the theoretical literature emphasises several reasons for departures from this hypothesis however the empirical literature is inconclusive when ricardian equivalence is tested in a life cycle framework the hypothesis is usually rejected while when the empirical analysis is based on optimising models it is usually accepted

international intertemporal solvency in industrialized countries evidence and implications recent large current account deficits among industrialized countries have caused concern for policy makers some believe for example that the current buildup of claims on the u s by foreigners violates her solvency condition with respect to the rest of the world recent research 22 suggests that for a country s intertemporal solvency condition to hold the change in the country s obligations to the rest of the world i e her current account deficit must be stationary stationarity tests on current accounts were performed for the u s by trehan and walsh 22 and wickens and uctum 23 for the u s and canada by otto 15 and for twenty three countries by gundlach and sinn 10 these papers present evidence that current accounts are non stationary for several major industrialized countries including the u s the u k canada germany and japan these findings do not favor international intertemporal solvency for this reason the issue merits further investigation in this paper we test for the stationarity of current account deficits of the group of seven industrialized countries preliminary results confirm many of gundlach and sinn s 10 findings however several events during the 1980s might have caused discrete breaks in current account balances events potentially linked with current account breaks include the reduction in world inflation tax reduction and reform in the u s and other industrialized countries attempts at international macroeconomic coordination i e the plaza accord and shifts in the after tax rate of return on capital in many countries as shown in recent research on gross national product 16 2 if such breaks are not accounted for stationarity tests will be biased in favor of accepting the null hypothesis of non stationarity our results suggest strong evidence of discrete breaks in the u s and japan and some evidence favoring breaks in the u k germany and canada the break in the u s current account appears to occur in 1983 while breaks in the other countries appear to occur somewhat later between late 1984 and 1987 more importantly once these breaks are incorporated the evidence is more favorable toward the stationarity of current accounts in these countries these findings thus support intertemporal solvency for these countries

fiscal policy and the current account deficits and trade jose vinals does the balance of payments act as an external constraint on the design of domestic economic policy in practice most governments believe it does yet popular discussion is sometimes confused this paper begins by evaluating the nature of the external constraint and the extent to which it can adequately be measured by the current account of the balance of payments it is often argued that a fiscal expansion will increase employment it is also widely held that a fiscal expansion necessarily leads to a deterioration of the current account while these propositions may hold in specific circumstances neither is generally true the theoretical basis of the two propositions is examined and compared with recent international experience when important changes in fiscal stance occurred the popular presumptions are confirmed by recent experience in the us the uk and germany but france is a counterexample to the first and spain to the second the important policy implication is that one can identify both in theory and in practice clear circumstances in which expansionary fiscal policy is appropriate and will not be thwarted by external considerations

are bond financed deficits inflationary a ricardian analysis this paper considers the possible theoretical validity of the following monetarist hypothesis that a constant positive government budget deficit can be maintained permanently and without inflation if it is financed by the issue of bonds rather than money the question is studied in a discrete time perfect foresight version of the competitive equilibrium model of sidrauski modified by the inclusion of government bonds as a third asset it is shown that the monetarist hypothesis is invalid if the deficit is defined exclusive of interest payments but that it is valid under the conventional definition it is also shown that the stock of bonds can grow indefinitely at a rate in excess of the rate of output growth provided that the difference is less than the rate of time preference these formal conclusions do not take account of possible limitations on taxing capacity arising from default incentives that tend to grow with the stock of bonds

is corporate bankruptcy efficient abstract auctions allocate resources to their highest valued uses yet bankruptcy does not use auctions instead judges determine a value and parcel out interests on the assumption that this valuation is correct errors inevitable in this process lead many persons to conclude that bankruptcy is inefficient this essay argues that the conclusion does not follow the costs of error in valuation may be less than the cost of conducting an auction legal rules endure because they are efficient or because they transfer wealth transfers are an implausible explanation of the current bankruptcy regime leaving efficiency as the prevailing explanation

on the limitations of government borrowing a framework for empiricaltesting this paper seeks to distinguish empirically between two views on the limitations of government borrowing according to one view nothing precludes the government from running a permanent budget deficit paying interest due on the growing debt load simply by issuing new debt an alternative perspective holds that creditors would be unwilling to purchase government debt unless the government made a credible commitment to balance its budget in present value terms we show that distinguishing between these possibilities is mathematically equivalent to testing whether a continuing currency inflation might be fueled by speculation alone or is instead driven solely by economic fundamentals empirical tests which have been developed for this economic question lead us to conclude that postwar u s deficits are largely consistent with the proposition that the government budget must be balanced in present value terms this abstract was borrowed from another version of this item

the comparison between ad valorem and specific taxation under imperfect competition abstract this paper compares ad valorem and specific taxation in two models of oligopoly with and without free entry predominantly ad valorem taxation implies a relatively low consumer price high tax revenue and when entry is precluded low profits ad valorem taxation dominates specific taxation from the welfare perspective the set of circumstances under which with free entry specific taxation raises welfare is a strict subset of that in which ad valorem taxation is welfare improving and in both models the maximisation of consumer welfare subject to a binding revenue constraint requires maximum reliance on ad valorem taxation

estimating tax incidence market power and market conduct the european cigarette industry abstract recent theoretical work has shown that the incidence of ad valorem and specific taxes may differ and each may be over or under shifted onto consumers in the presence of imperfect competition these results are used to derive a method of estimating market power and conduct an application is made to the european cigarette industry previous empirical comparison of the incidence of ad valorem and specific taxes is limited for a group of countries with broadly similar cigarette industries there is evidence of undershifting of both taxes with the specific tax having a significantly greater impact on price the extremes of both perfect competition and monopoly can be rejected behaviour is no less competitive than the equivalent of cournot

state lotteries as a source of revenue a re examination most of the academic literature that has examined state lotteries has had a negative assessment of them studies of lotteries as a source of revenue have reported that even under the best circumstances they generate only a tiny proportion of a state s revenues and the lottery revenues are so volatile that states cannot and should not be dependent on them in addition the general consensus is that lotteries have high administrative costs and that they may reduce other sources of state revenue 1 in contrast to this negative view prevalent in the academic literature lotteries have been exceedingly popular with policymakers in state capitals and among the general public most of the literature which casts a negative light on lotteries as a revenue source looked at data through the mid 1980s since then the number of states operating lotteries has grown from 17 in 1985 to 33 in 1992 in only one state north dakota during the past 30 years has a lottery referendum failed to achieve a majority of votes 2 why are lotteries so popular is it because voters are ill informed and unsophisticated do proponents mistakenly believe that they will help cure government revenue shortfalls or is it possible that lotteries really do have a significantly favorable fiscal impact that lottery revenues are not as small and destabilizing as the academic literature maintains

the growth of gambling and prediction markets economic and financial implications in recent years there has been a substantial global increase in gambling and prediction markets including casinos sports betting lotteries elections and wagering on financial instruments this trend has heightened interest in numerous economic and financial issues related to this sector these include questions relating to the efficiency of these markets heterogeneity in risk attitudes among economic agents and the use of prediction markets in policy analysis the papers in this special issue provide a mix of theoretical and empirical evidence on these issues

in a world without borders the impact of taxes on internet commerce the rapid rise in sales over the internet and the fact that most internet buyers pay no sales tax has ignited a considerable debate over taxes and the internet this paper uses new data on the purchase decisions of approximately 25 000 online users to examine the effect of local sales taxes on internet commerce the results suggest that controlling for observable characteristics people living in high sales taxes locations are significantly more likely to buy online the results are quite robust and cannot be explained by unobserved technological sophistication shopping costs or other alternative explanations the magnitudes in the paper suggest that applying existing sales taxes to internet commerce might reduce the number of online buyers by up to 24 percent

a century of current account dynamics abstract recent globalization trends have refocused attention on the historical evolution of international capital mobility over the long run the issue is examined here using time series analysis of current account dynamics for fifteen countries since circa 1850 the inter war period emerges as an era of low capital mobility and only recently can we observe a tentative return to the degree of capital mobility witnessed during the late nineteenth century the analysis of saving and investment dynamics also helps make sense of the frequently observed high correlation of saving and investment rates in historical data

the sustainability of current account deficits abstract this paper proposes a new method of determining whether a country is likely to be able to sustain its current account deficits without defaulting on its debt it is based on the notion of the national intertemporal budget constraint ibc which is derived from a forward solution of the balance payments identity although the problem is formally similar to that considered in the literature on the government ibc a more general solution is obtained by allowing the primary deficit to be endogenous instead of exogenous it is shown that the existence of negative feedback from net indebtedness to the primary deficit a wealth effect is sufficient this method supplants the ad hoc approach previously adopted in the current account literature whilst many of the same variables appear a formal structure for analysing them is provided

shadow economies size causes and consequences using various methods the size of the shadow economy in 76 developing transition and oecd countries is estimated average size varies from 12 percent of gdp for oecd countries to 23 percent for transition countries and 39 percent for developing countries increasing taxation and social security contributions combined with rising state regulations are driving forces for the increase of the shadow economy especially in oecd countries according to some findings corruption has a positive impact on the size of the shadow economy and a growing shadow economy has a negative effect on official gdp growth

the welfare effects of lotto evidence from the uk abstract this paper estimates the demand for lottery tickets using pooled cross section data that contain individual incomes and extensive information about characteristics one of the cross sections corresponded to a draw which was a double rollover the jackpot was enhanced by adding the two previous draws jackpots which had not been won together these datasets provide sufficient observations facing different prices to allow us to estimate the price elasticity as well as the income elasticity of demand we estimate tobit and other specifications and use the estimates to evaluate the welfare effects arising from the introduction of the lottery

how to evaluate the solvency of an indebted nation reassessing third world debt daniel cohen the conventional measures of the solvency of developing countries usually rely on such indices as debt export or debt gnp ratios the underlying rationale is that to be solvent a country must eventually pay back all its debt this paper starts from two simple but important remarks first solvency need not require the full eventual repayment of all debt continued borrowing may be possible rather what is required is that a country s debt accumulation does not outstrip its capacity to make future repayments and the capacity of lenders to make future loans second solvency therefore cannot be defined independently of the growth rates of lender and borrower countries nor of the interest rate at which past debts accumulate putting these ideas together a new solvency index is proposed and this is computed for all the less developed countries this new index suggests a less gloomy view of the international debt crisis the largest debtors may have already accomplished an adjustment which is more than sufficient to restore their solvency when this is properly computed to investigate this claim there is a detailed analysis of the policies recently adopted in argentina and brazil

business cycles in international historical perspective business cycle models seek to answer the question of why economies go through cycles of recession and recovery or boom and bust any theory of the business cycle makes two sorts of claims what shocks are most important in disturbing the economy and what economic structure is necessary for propagating these shocks for example one common explanation of business cycles begins with monetary shocks and then seeks to explain why monetary shocks are not purely neutral as neoclassical theory would have it and instead have real effects at least in the short term early models in this vein were often implicitly or explicitly based on the proposition that markets do not clear continuously early equilibrium real business cycle theories instead emphasized the importance of real shocks especially to technology which may cause socially efficient fluctuations even when markets are always in equilibrium more recent models have attempted to marry the equilibrium approach to macroeconomics with the substantive keynesian ideas that money is not neutral and that economic fluctuations are costly new keynesian theories of the business cycle admit the possibility of a number of economic shocks including monetary and technology shocks but then focus on explaining how nominal price rigidities within the economy can turn these shocks into recessions or booms other models show that business cycles driven by keynesian animal spirits are consistent with rigorous microfoundations and rational expectations seeking empirical evidence for and against these various approaches we turn business cycle theories loose on perhaps the greatest macroeconomic laboratory

assessing the fiscal stance in the european union and the united states 1970 2011 the huge increases in debt gdp ratios following the 2007 2009 global financial crisis which are unprecedented except in times of war has focused attention on the viability of the fiscal positions of eu countries and the us how to assess this and the likely future evolution of these positions this paper proposes an indicator of the fiscal stance which computes the fiscal adjustment required to reach a specific debt gdp targeted given the forecasts of future deficit and interest rates obtained from an unrestricted recursively estimated var model the index is easy to compute and can be decomposed to disclose the different contribution of revenue expenditure nominal yields inflation and growth to the fiscal stance for this reason it provides a transparent and detailed measure of the fiscal stance particularly suitable for multi country surveillance as a result the index improves on the tax gap indicators widely used by governments and international agencies and is far more informative than formal econometric tests of fiscal sustainability the time series of the indicator for individual eu countries and the us show that their fiscal position has fluctuated considerably over the last 40 years and has particularly deteriorated since 2007 the index predicts that the adjustment required to restore pre crisis debt gdp levels are higher for high debt countries like greece italy and portugal they become more severe the shorter is the time horizon for the adjustment as a large degree of uncertainty surrounds the assessment of the fiscal stance in the medium and long run we argue that policy makers should inform their policy based on the worst case scenario predicted by the indicator

current account deficit sustainability the case of barbados this article investigates the sustainability of the current account deficit in barbados over the period 1960 to 2006 various unit root and cointegration techniques are employed to determine whether the country is satisfying its intertemporal budget constraint ibc the cointegration regressions suggest that the current account of barbados is sustainable and that deviations from long run equilibrium between real exports and imports are corrected in the short run with imports making the adjustment

the economics of casino taxation in this article a model of the costs of a casino is developed that focuses on the implications for economic welfare of different taxation schemes for casinos the situation being considered is in a country where casinos cater exclusively to foreign tourists the goal of the country is to determine the maximum amount of taxes that can be extracted from the activities of this sector under different systems of taxation when the price of gambling is set by regulation above its competitive level the economic losses created by excessive investment in the sector can be reduced by taxation a turnover tax on the amount gambled can maximize both tax revenue and the economic welfare of the country due to administrative constraints a number of countries rely on the taxation of the casinos fixed assets or a combination of a turnover tax and a tax on fixed costs the model is applied to the situation in north cyprus the annual economic efficiency loss from its poorly designed tax policies on casino gambling is

are stationarity and cointegration restrictions really necessary for the intertemporal budget constraint abstract time series related to fiscal and external deficits are commonly subjected to stationarity and cointegration tests to assess if the deficits are sustainable such tests are incapable of rejecting sustainability the intertemporal budget constraint proves to be satisfied if either the debt series or the revenue and with interest spending series are integrated of arbitrarily high order i e stationary after differencing arbitrarily often revenues and spending do not have to be cointegrated rejections of low order difference stationarity and of cointegration are thus consistent with the intertemporal budget constraint error correction type policy reaction functions are suggested as more promising for understanding deficit problems

fiscal reaction under endogenous structural changes in brazil abstract regarding the importance of fiscal policy in smoothing the impact of shocks such as the international financial and economic crises the paper analyzes the sustainability of the brazilian fiscal policy by taking into consideration the possibility of multiple endogenous structural breaks on the coefficients of government reaction function from monthly data in the period 1991 2008 tests on the reliable estimates dictate the occurrence of structural change in may 1994 and another in february 2003 there has been a situation of fiscal solvency in brazil but only from may 1994 the hitherto innocuous actions of government to formulate policies on public debt turn out to be significant as it rose twofold after february 2003 this reinforces the existence of a more flexible alternative to implement strategic policy in brazil if an eventual alternative for increasing public spending is a way of hindering the effects of international financial crises without compromising the fiscal targets

the economics of casino gambling america s casino industry expanded rapidly in the 1990s spreading from nevada and atlantic city to mining towns riverboats race tracks and tribal lands and moving from isolated resort settings to urban and suburban venues this article examines economic characteristics of the casino industry including the evolution of major casino markets pricing of gaming products market structures regulatory constraints and social and economic impacts attributable to casinos when competitive casinos show strong economies of scale and scope but many new jurisdictions limit the number or size of operations thus creating substantial economic rents allocation of these rents are fundamentally politically determined

the sustainability of india s current account this study conducts an investigation into the sustainability of the indian current account using data for 1950 onwards a necessary condition for current account sustainability is that exports and imports are cointegrated after testing for unit roots that allow for a structural break we employ parametric tests for cointegration based on johansen 1995 and saikkonen and lutkepohl 2000a b c as well as the nonparametric procedure proposed by breitung 2002 and breitung and taylor 2003 that does not assume linearity by employing these procedures recursively two distinct regimes are identified characterized by whether or not imports and exports are cointegrated the regime of noncointegration runs until the late 1990s and the second regime of cointegration is present after that this latter regime coincides with the liberalization of the indian economy

fiscal policy rules and the sustainability of public debt in europe the sustainability of public debt is interpreted as the result of the interaction of fiscal policy with the economic environment and not as a statistical concept as in most of the recent literature if debt is not to explode over time policymakers have to respond to the changing conditions in the macroeconomic environment this article defines the conditions that will ensure compliance of fiscal policy with the intertemporal budget constraint in the context of europe s fiscal policy rules the empirical part of the article reveals that european public debt is sustainable in this respect but questions regarding long run liquidity requirements remain unresolved

u s federal indebtedness and the conduct of fiscal policy abstract this paper examines whether the conduct of u s fiscal policy since the 1920s has been influenced by constraints on the accumulated stock of outstanding federal debt the evidence is affirmative during most of the inter and post war period policy in effect stabilized the federal debt relative to gnp but after 1981 large debt and debt service costs failed to produce deficit reductions consistent with the pattern of previous decades

ethical issues in bankruptcy a jewish perspective the ethical issues involved in bankruptcy affect the debtor the creditor and the society in which they operate facing the debtor is his responsibility to pay back the loans and credit extended to him while the creditor has to decide whether or not to press his legal rights irrespective of the consequences to the debtor society will have to determine to what extent if any it is prepared or obligated to fund the rehabilitation of the debtor and those employees whose employment is terminated as a result of the bankruptcy these issues will be determined according to the value structure of the particular souly in which debtor and creditor operate this paper views the issues in a jewish perspective debtors are considered to always be liable for their debts and there is a moral shame attached to bankruptcy except in those cases where it is caused by natural disasters while creditors are taught and encouraged to voluntarily waive their rights this is considered charity with all its negative overtones the courts are obligated to review the debtors assets and sell them if necessary to meet the creditors loans leaving only basic necessities for minimal living of the debtor and his family society however including the creditor a part of the group are obligated to fund the rehabilitation of the debtor either through its interest free loan charity or the provision of alternative employment these may be funded out of communal taxes

are southern poor countries governments more profligate than their northern rich counterparts fiscal criteria and impulse responses this study examines the health of public finances in different geographical regions by emphasising the discrepancies in north versus south and rich versus poor countries the last decade s debt and deficit figures depicting a general fiscal consolidation across regions and income levels show signs of worsening when the fiscal criteria are adjusted for cyclical factors fiscal pressure appears in most countries since the end of the 1990s but has been more persistent in poor countries and in asia the dynamics of governments reaction to debt accumulation reveals however that most regions exhibit consistent anti debt policies to various degrees the exception is the latin american and caribbean region where results suggest a lack of debt fighting policies among income categories rich countries generate the highest primary surpluses when confronted with debt accumulation

foreign debt accumulation financial and fiscal effects and monetary policy reactions in developing countries abstract this paper analyzes the effects of the current account of government and government guaranteed foreign debt on the one hand and net foreign liabilities or the cumulated current account deficit on the other hand in a sample of 26 developing countries while the cumulated current account deficit generates stabilizing forces pissibly through financial and wealth effects large amounts of government and government guaranteed debt produce destabilizing effects by stimulating capital flight i also find that monetary policy reactions are stabilizing in the case of the cumulated current account deficit but desstabilizing in the case of a build up of government and government guaranteed foreign debt jel f32 f34

testing a present value model of the current account evidence from us and canadian time series abstract this paper presents a simple model of current account determination based upon the permanent income hypothesis of private consumption behavior under rational expectations the model employs a representative national agent who is forward looking and can borrow and lend at a constant world interest rate a present value relationship for the current account is derived and its implications are tested on post war data for the united states and canada testing is done using the framework developed by campbell and shiller 1987 which allows the forcing variables in the model to be difference rather than trend stationary our empirical results indicate the most stringent restrictions of the present value model are strongly rejected by the us and canadian data however less formal procedures suggest the consumption smoothing model has some ability to track the dynamic behavior of the us current account jel f32

tax changes and cigarette prices the recurring question of the difference between specific and ad valorem taxes has recently been revived by barzel 1976 who argued p 1185 that when quality is not fully controlled the effects of the two types of taxes differ radically the excise tax induces a substitution of quality for quantity resulting in a greater increase in the price per unit than predicted by the constant quality model the ad valorem tax induces a reduction in quality and lower after tax price than predicted evidence consistent with these hypotheses is found in the response of cigarette prices to tax changes in the further tests reported by johnson 1978 prices rise significantly less than the tax in new hampshire where the state tax was ad valorem and significantly more in the remaining states which impose specific taxes the purpose of this note is to question not barzel s analysis but rather the interpretation of the evidence on the pedestrian grounds of implausibility as barzel himself observes p 1194 n 32 the size of new hampshire makes it unlikely that cigarettes would be tailormade for it the scope for removing characteristics is quite limited then the scope for adding characteristics in other states seems equally limited to avoid misunderstanding it should be emphasized that the hypothesized variations in quality are a supply side phenomenon not a demand side response to the relative cheapening of superior brands when a specific tax is increased johnson s estimates imply that the 90 increase in the new hampshire tax over the period 1954 76 should have reduced the net price by 3 6 ceteris paribus the slightly larger mean tax increase in the remaining 48 continental states should have raised net price by 0 90 what changes in the quality of the services sold with cigarettes could have justified such a differential what are the observable counterparts of the tax changes in the absence of a convincing answer to those questions the estimated response of cigarette prices to taxes represents a fact in search of a theory

red signals current account deficits and sustainability abstract this paper proposes a method to asses the potential problems of sustainability of a country s sovereign debt we claim that the relevant variables used for this analysis are typically subject to changes that are associated with changes in macroeconomics policies we propose a procedure for identifying periods under which the current account accumulates at a non stationary rate our approach is based on imposing identifying restrictions on markov switching type models empirical applications of the procedure to argentina brazil japan uk and usa are examined and discussed

do new gambling products displace old evidence from a postcode analysis paton d and vaughan williams l do new gambling products displace old evidence from a postcode analysis regional studies this paper examines the extent to which new gambling products displace traditional products in particular it tests whether the introduction of fixed odds betting terminals fobts affected the number of traditional gambling machines in great britain it uses data from geographical districts based on postcodes within great britain between 2001 and 2006 using a propensity score matching approach no significant evidence is found that fobts caused a reduction in the number of machines in venues other than licensed betting offices paton d and vaughan williams l fobts 2001 2006 fobts paton d et vaughan williams l les nouveaux jeux de hasard est ce qu ils remplacent les anciens des preuves provenant d une analyse

public debt the unit root hypothesis and structural breaks a multi country analysis we assess fiscal performances in g7 and selected latin american and asian countries we consider two questions i have public finances been sustainable ii do countries follow more restrictive fiscal policies when debt starts to rise we find that i the traditional unit root tests often overlook the corrective actions taken by many governments controlling for structural breaks changes the non stationarity results dramatically among the three groups ii estimation of a reaction function for governments expanded by incorporating structural breaks provides further evidence for significant active anti debt policies among g7 countries and to a lesser extent in the other regions