optimal production and carbon emission reduction level under cap and trade and low carbon subsidy policies abstract in recent years massive carbon emissions have caused serious global environmental damage such as a worsening greenhouse effect and thick haze to curb carbon emissions as well as maintain sustainable economic development governments promote the development of low carbon economy by issuing multiple policies among which the cap and trade policy ctp and low carbon subsidy policy lcsp are widely adopted moreover manufacturers are increasingly adopting carbon emission reduction technology to produce greener products considering related government policies and rising environmental awareness among consumers to give policy making insights to governments as well as production and carbon emission reduction decision making insights to manufacturers this paper investigates the impacts of ctp and lcsp on the production and carbon emission reduction level of a manufacturer and explores which policy is better for society the results show that the carbon emission reduction level increases as the carbon trading price increases whereas it is independent of the unit low carbon subsidy interestingly the carbon trading price does not always have a negative effect on the manufacturer s profit and the cap does not always produce a positive effect on the manufacturer s profit more importantly we find that lcsp is more beneficial to society when the environmental damage coefficient is less than a threshold but otherwise ctp is more beneficial

a quantitative evaluation of payroll tax subsidies for low wage workers an equilibrium search approach abstract phelps phelps e 1994 low wage employment subsidies versus the welfare state american economic review 84 54 58 presented the case for a low wage subsidy policy since the mid 1990s france has experimented with this strategy this paper evaluates the effect of this policy on employment and also on output and welfare we construct an equilibrium search model incorporating wage posting and specific human capital investment where unemployment and the distribution of both wages and productivity are endogenous we estimate this model using french data numerical simulations show that the prevailing minimum wage allows a high production level to be reached by increasing training investment even though the optimal minimum wage is lower we show that payroll tax subsidies enhance welfare more than a reduction in the minimum wage when they are spread over a large range of wages in order to avoid specialization in low productivity jobs

economic development and defense expenditure developing countries spend large amounts of scarce resources on military expenditure the effect of defense spending on economic growth and development is an important topic and merits close scrutiny from development economists the main purpose of this paper is to analyze the interrelationships among defense burden saving and economic growth within the context of a fully specified empirical model since benoit s seminal work published in this journal and elsewhere started the recent debate and controversy it is necessary to discuss his findings in some detail benoit made a forceful and interesting case for the existence of a causal relationship between defense expenditure and growth in less developed countries ldcs his main hypothesis was that defense burden is positively correlated to growth rates in ldcs furthermore the chain of causation is such that a high defense burden causes the growth rate to rise defense helps development policy implications of such a hypothesis are then spelled out the purpose of this section is to evaluate benoit s thesis and critically analyze its conclusions the main finding is that for a large sample of 44 countries there exists a positive correlation between rate of growth and defense burden defense expenditure as a proportion of national income benoit used the growth rate of nondefense civilian output for the index of growth to avoid the criticism of double counting there is an interesting definitional question that arises regarding the variables used by benoit here he defined growth in civilian output as growth in gdp minus growth in defense spending all in real terms defining gdp as y civilian output as v and defense spending as d we may write

green taxes can we protect the environment and improve the tax system at the same time on a cursory inspection public economics appears to provide a straightforward and compelling answer of yes to the question posed in the title to this paper as economists have long argued appropriately designed taxes can in principle at least efficiently restrain levels of polluting activities and in addition such taxes will generate revenues so that we can reduce rates on other forms of taxation that distort the functioning of the economy green taxes in short promise a double dividend they can both reduce excessive levels of pollution and increase the efficiency of the overall tax system at least so several economists have argued recently 17 20 but is this really so with the growing recognition of the enormous revenue potential of certain environmental taxes especially carbon taxes to address the problem of global warming public economists have returned to this question with a new round of research efforts directed both to understanding the properties of pollution taxes as revenue sources and to estimating their revenue potential and the magnitude of their effects on the economy and the newly emerging literature is producing some quite astonishing and very troubling findings in this paper i want to review this work and explore its implications when viewed in relation to some other research it appears to suggest that most forms of regulatory activity at least those that increase the costs of the regulated activities may have hitherto unappreciated costs of a stunning magnitude what many of us would have taken to be second order side effects of environmental and other regulatory policies can be of a magnitude that compromises to a significant extent their welfare enhancing properties having reviewed this body of work i wish also to explore some issues in the political economy of green taxes it is helpful to begin by briefly putting the issue in historical perspective

some models for estimating technical and scale inefficiencies in data envelopment analysis in management contexts mathematical programming is usually used to evaluate a collection of possible alternative courses of action en route to selecting one which is best in this capacity mathematical programming serves as a planning aid to management data envelopment analysis reverses this role and employs mathematical programming to obtain ex post facto evaluations of the relative efficiency of management accomplishments however they may have been planned or executed mathematical programming is thereby extended for use as a tool for control and evaluation of past accomplishments as well as a tool to aid in planning future activities the ccr ratio form introduced by charnes cooper and rhodes as part of their data envelopment analysis approach comprehends both technical and scale inefficiencies via the optimal value of the ratio form as obtained directly from the data without requiring a priori specification of weights and or explicit delineation of assumed functional forms of relations between inputs and outputs a separation into technical and scale efficiencies is accomplished by the methods developed in this paper without altering the latter conditions for use of dea directly on observational data technical inefficiencies are identified with failures to achieve best possible output levels and or usage of excessive amounts of inputs methods for identifying and correcting the magnitudes of these inefficiencies as supplied in prior work are illustrated in the present paper a new separate variable is introduced which makes it possible to determine whether operations were conducted in regions of increasing constant or decreasing returns to scale in multiple input and multiple output situations the results are discussed and related not only to classical single output economics but also to more modern versions of economics which are identified with contestable market theories

has china s fast industrial growth been efficient an industry level investigation with a newly constructed data set we adopt contemporaneous nonradial and variable returns to scale assumptions in a data envelopment analysis dea exercise to address the inefficiency problem in chinese industries in different policy regimes using a newly constructed data set for 24 chinese manufacturing industries in 1952 2008 while confirming that the central planning period was indeed a graveyard for productivity that entailed severe technical regress and efficiency losses we do not find a steady improvement in efficiency during the reform period despite strong technical progress we argue that the resurgent prominence of the government and the state sector since the late 1990s especially following china s world trade organization accession has obstructed the efficiency improvement

productivity growth technical progress and efficiency in their comment subhash c ray and evangelia desli 1997 hereafter rd point out that the specification of the decomposition of the malmquist productivity index used by fare et al 1994 hereafter fgnz is not unique and propose and compute an alternative specification of that decomposition we will discuss additional decompositions at the end of this note but proceed here by comparing the rd decomposition with fgnz based on both conceptual and computational grounds rd provide a discussion of the overall malmquist productivity index including the important issue of when this index is equivalent to the traditional notion of total factor productivity tfp namely under the condition that the reference technology be consistent with constant returns to scale crs as they point out this will yield a measure of tfp even if the true underlying technology is not crs for example both rd and fgnz use the crs reference technology to compute overall malmquist productivity one of the key issues raised is the role of the underlying scale properties of the benchmark technologies used to define and compute both productivity and its components in particular two reference technologies are employed in both rd and fgnz what we refer to as crs and variable returns to scale vrs technologies by construction these technologies are nested the crs technology contains the vrs technology as in figure 1 in rd this nestedness provides the logical basis for our decomposition at a very intuitive level we would argue that these two benchmarks can be used to provide bounds on the underlying true but unknown technology 2 intuitively we see the vrs technology providing a type of convex inner approximation whereas the crs technology provides a type of convex outer approximation thus these two technologies provide alternative benchmarks they do not require that the data satisfy either crs or vrs another possible intuitive interpretation is that the crs captures a perhaps hypothetical long run and the vrs approximates the short run as a reference technology the crs technology has some very useful features for example it captures the notion of maximal

public acceptance for environmental taxes self interest environmental and distributional concerns abstract while strongly recommended by economists it has often been politically difficult to impose taxes on externalities there is a substantial literature on public attitudes towards environmental taxes there has however been few comprehensive attempts to understand attitudes towards environmental taxes the main research question in this paper is which factors influence support for fuel taxation we propose a model of attitudes towards fuel taxation and test this model as well as more specific hypotheses using data from a representative survey of the adult norwegian population our results suggest that support for fuel taxation is best predicted by beliefs about environmental consequences followed by beliefs about consequences to others beliefs about consequences to self self interest is the factor that explains the least variation in support for fuel taxation the academically interesting result that support cannot be well explained without capturing a broad range of motivational factors is also highly policy relevant it implies that there is no magic formula for increasing public support for environmental taxes there are however some issues which can be addressed trust in how well the government spends the revenue and the perception that taxation does very little to change behaviour and thus to reduce environmental problems

sustainable allocation of greenhouse gas emission permits for firms with leontief technologies abstract in this paper we deal with production situations where a cap or limit to the amount of greenhouse gas emissions permitted is imposed fixing a tax for each ton of pollutant emitted is also considered we use bankruptcy rules to define cooperative games with externalities associated with these situations and analyze the existence of coalitionally stable allocations of the emission permits we prove that the constrained equal awards cea rule provides stable allocations and as a direct mechanism it is incentive compatible these two facts have interesting managerial implications to control pollution emissions

tracking global carbon revenues a survey of carbon taxes versus cap and trade in the real world abstract we investigate the current use of public revenues which are generated through both carbon taxes and cap and trade systems more than 28 3 billion in government carbon revenues are currently collected each year in 40 countries and another 16 states or provinces around the world of those revenues 27 7 8 billion are used to subsidize green spending in energy efficiency or renewable energy 26 7 4 billion go toward state general funds and 36 10 1 billion are returned to corporate or individual taxpayers through paired tax cuts or direct rebates cap and trade systems 6 57 billion in total public revenue earmark a larger share of revenues for green spending 70 while carbon tax systems 21 7 billion more commonly refund revenues or otherwise direct them towards government general funds 72 of revenues drawing from an empirical dataset we also identify various trends in systems use of carbon revenues in terms of the total revenues collected annually per capita in each jurisdiction and offer commensurate qualitative observations on carbon policy design choices

the environmental and economic impact of the carbon tax in australia to fulfil its emission reduction target pledged in the copenhagen accord the australian government has determined to introduce a carbon tax from july 1st 2012 this paper simulates the effects on the environment and on the economy of a carbon tax of a 23 per tonne of carbon dioxide proposed by the government with and without a compensation policy we employ a computable general equilibrium model with an environmentally extended social accounting matrix according to the simulation results the carbon tax can cut emissions effectively but will cause a mild economic contraction because the price signal is intact the proposed compensation plan has little impact on emission cuts while significantly mitigating the negative effect of a carbon tax on the economy

evolutionary macroeconomic assessment of employment and innovation impacts of climate policy packages climate policy has been mainly studied with economic models that assume representative rational agents such policy aims though at changing carbon intensive consumption and production patterns driven by bounded rationality and other regarding preferences such as status and imitation to examine climate policy under such alternative behavioral assumptions we develop a model tool by adapting an existing general purpose macroeconomic multi agent model the resulting tool allows testing various climate policies in terms of combined climate and economic performance the model is particularly suitable to address the distributional impacts of climate policies not only because populations of many agents are included but also as these are composed of different classes of households the approach accounts for two types of innovations which improve either the carbon or labor intensity of production we simulate policy scenarios with distinct combinations of carbon taxation a reduction of labor taxes subsidies for green innovation a price subsidy to consumers for less carbon intensive products and green government procurement the results show pronounced differences with those obtained by rational agent model studies it turns out that a supply oriented subsidy for green innovation funded by the revenues of a carbon tax results in a significant reduction of carbon emissions without causing negative effects on em ployment on the contrary demand oriented subsidies for adopting greener technologies funded in the same manner result in either none or considerably less re duction of carbon emissions and may even lead to higher unemployment our study also contributes insight on a potential double dividend of shifting taxes from labor to carbon

productivity and efficiency change and shareholder value evidence from the spanish banking sector productivity change and shareholder value have been analysed in the banking sector in the last few years although it should be noted that these two important aspects have been studied separately in this regard the main contribution of our study is to link these two lines of research by verifying whether those banks characterized by higher levels of efficiency and productivity change have a higher shareholder value to measure changes in efficiency and productivity we use the malmquist nonparametric technique which is calculated from data envelopment analysis dea linear programming approach the malmquist total factor productivity index enables separation of the catching up effect i e changes over time in technical efficiency from technological change i e the shift of best practice frontier over time due to technological progress our results for a sample of listed spanish banks in the period 2000 to 2004 confirm that those banks with higher efficiency and productivity changes have a higher

the impact of military technology transfer on economic growth international evidence the purpose of this article is to measure the impact of military technology transfer on economic growth for 67 selected countries during the period 2000 to 2005 through the application of the malmquist productivity index which is broken down into efficiency change and technical change our main findings are as follows first technology diffusion is all pervading in half of the sampled countries due to pure efficiency and scale efficiency changes second a higher income level and an excess of arms imports lead to innovative activities third middle income countries have higher efficiency and pure efficiency changes these contribute to higher total productivity change finally after separating the impact of capital investment from that of arms imports the diffusion of military technology has a more positive and substantial impact on economic growth thereby revealing the presence of externalities between countries

a competitive carbon emissions scheme with hybrid fiscal incentives the evidence from a taxi industry abstract as two major approaches to reduce carbon emissions command and control instruments and market based carbon trading systems have their own weaknesses our paper first proposes a type of endogenous equilibrium methodology to dynamically derive the industrial carbon emissions standards at the equilibrium the sum of all carbon assets and liabilities is zero in the considered industry moreover the standards fall over time with low carbon technological advance most importantly combining pigou s and coase s ideas we construct a fiscal instrument accounting for both carbon taxes and allowances based on the dynamically improved emissions standards and carbon trading prices this no revenue for government method implements a self operated ecology for carbon trading market finally considering the waterloo recession of carbon prices we introduce an adjustment factor into the model which generates a negative feedback mechanism with carbon prices to support our idea we present the application to beijing taxi industry in detail and raise relative policy implications based on the evidence

taxes organizational form and the deadweight loss of the corporate income tax abstract by changing the relative gain to incorporation corporate taxation can play an important role in a firm s choice of organizational form general equilibrium models have shown that substantial shifting of organizational form in response to tax rates implies a large deadweight loss of taxation this paper estimates the impact of taxes on organizational form using data from 1900 1939 the results indicate that the effect of taxes is significant but small a corporate rate increase of 0 10 raises the non corporate share of capital 0 002 0 03 the implied deadweight loss of the corporate income tax is around 5 10 of revenue

do military exports stimulate civil exports recent research suggests that the economic benefits to the uk economy from arms exports might not be that great surveys suggest that almost two thirds of those that lose their job in the defence industry either retire or find new work within one year and arms exports are heavily subsidized by the uk government thus any cut in such exports would reduce the annual subsidy payable by the british taxpayer however in addition to the direct economic benefits from defence exports there might be indirect effects hartley and hooper does trade follow the flag a study of the uk trade and security policy centre for defence economics university of york 1998 considered whether uk arms exports might lead to higher civil exports this paper examines this hypothesis it estimates import demand functions for three countries indonesia saudi arabia and south korea and for the world as a whole over the period 1970 1997 the results suggest that uk arms exports do not stimulate uk civil exports

estimating most productive scale size using data envelopment analysis abstract the relation between the most productive scale size mpss for paparticular input and output mixes and returns to scale for multiple inputs multiple outputs situations is explicitly developed this relation is then employed to extend the applications of data envelopment analysis dea introduced by charnes cooper and rhodes ccr to the estimation of most productive scale sizes for convex production possibility sets it is then shown that in addition to productive inefficiencies at the actual scale size the ccr efficiency measure also reflects any inefficiencies due to divergence from the most productive scale size two illustrations of the practical applications of these results to the estimation of most productive scale sizes and returns to scale for hospitals and stem electric generation plants are also provided emphasize the advantage of this method in examining specific segments of the efficient production surface

designing climate mitigation policy this us paper provides an exhaustive review of critical issues in the design of climate mitigation policy by pulling together key findings and controversies from diverse literatures on mitigation costs damage valuation policy instrument choice technological innovation and international climate policy the authors begin with the broadest issue of how high assessments suggest the near and medium term price on greenhouse gases would need to be both under cost effective stabilization of global climate and under net benefit maximization or pigouvian emissions pricing the remainder of the paper focuses on the appropriate scope of regulation issues in policy instrument choice complementary technology policy and international policy architectures

economic prescriptions for environmental problems how the patient followed the doctor s orders o ne of the dangers with ivory tower theorizing is that it is easy to lose sight of the actual set of problems which need to be solved and the range of potential solutions as one who frequently engages in this exercise i can attest to this fact in my view this loss of sight has become increasingly evident in the theoretical structure underlying environmental economics which often emphasizes elegance at the expense of realism in this paper i will argue that both normative and positive theorizing could greatly benefit from a careful examination of the results of recent innovative approaches to environmental management the particular set of policies examined here involves two tools which have received widespread support from the economics community marketable permits and emission charges pigou 1932 dales 1968 kneese and schultze 1975 both tools represent ways to induce businesses to search for lower cost methods of achieving environmental standards they stand in stark contrast to the predominant command and control approach in which a regulator specifies the technology a firm must use to comply with regulations under highly restrictive conditions it can be shown that both of the economic approaches share the desirable feature that any gains in environmental quality will be obtained at the lowest possible cost baumol and oates 1975 until the 1960s these tools only existed on blackboards and in academic journals as products of the fertile imaginations of academics however some countries have recently begun to explore using these tools as part of a broader strategy for managing environmental problems

combining price and quantity controls to mitigate global climate change abstract uncertainty about compliance costs causes otherwise equivalent price and quantity controls to behave differently and leads to divergent welfare consequences although most of the debate on global climate change policy has focused on quantity controls due to their political appeal this paper argues that price controls are more efficient simulations based on a stochastic computable general equilibrium model indicate that the expected welfare gain from the optimal price policy is five times higher than the expected gain from the optimal quantity policy an alternative hybrid policy combines both the political appeal of quantity controls with the efficiency of prices using an initial distribution of tradeable permits to set a quantitative target but allowing additional permits to be purchased at a fixed trigger price even sub optimal hybrid policies offer dramatic efficiency improvements over otherwise standard quantity controls for example a 50 trigger price per ton of carbon converts the 3 trillion expected loss associated with a simple 1990 emission target to a 150 billion gain these results suggest that a hybrid policy is an attractive alternative to either a pure price or quantity system

carbon tax incidence on household demand effects on welfare income inequality and poverty incidence in thailand abstract studying the impact of a carbon tax on household demand can be relevant in terms of securing public acceptance of a carbon tax and clarifying the implications for policy design this paper aims to fill a gap in the academic literature by simulating carbon tax scenarios and estimating distributional effects of the tax on household welfare income inequality and poverty rates based on household consumption in thailand the study employs a microsimulation model incorporating the economy wide effects of the tax on prices and consumers behavioral responses to changes in prices the results indicate that a carbon tax is progressive in thailand under revenue recycling scenarios by expanding social transfer programs when carbon tax revenues are recycled through pensions for elderly people the carbon tax could reduce the poverty rate and improve the welfare of households in the lowest quintile the results imply that the distributional impacts of environmental taxes could result in favorable outcomes for income inequality and poverty reduction in developing countries

is shapley cost sharing optimal abstract a general approach to the design of budget balanced cost sharing mechanisms is to use the shapley value applied to the given cost function to define payments from the players to the mechanism is the corresponding shapley value mechanism optimal in some sense we consider the objective of minimizing worst case inefficiency subject to a revenue constraint and prove results in three different regimes first for the public excludable good problem the shapley value mechanism minimizes the worst case efficiency loss over all truthful deterministic and budget balanced mechanisms that satisfy equal treatment second even with randomization and approximate budget balance allowed and dropping equal treatment the worst case efficiency loss of the shapley value mechanism is within a constant factor of the minimum possible third for no deficit mechanisms we prove a general positive result for every monotone cost function a suitable blend of the vcg and shapley value mechanisms is no deficit and enjoys good approximate efficiency guarantees

how to set the proper level of carbon tax in the context of chinese construction sector a cge analysis abstract under global warming and severe environmental problems the paris agreement urges china to accelerate the pace of the low carbon economy improving the energy efficiency of the construction sector may be an important way to reduce co2 emissions as a reasonable energy policy instrument a carbon tax can effectively improve energy efficiency and reduce co2 emissions in this study a dynamic computable general equilibrium model is developed to explore the possible impacts of different carbon tax conditions on the energy consumption of the construction sector and the macroeconomy of china results show that the appropriate carbon tax is 60 rmb t which cannot only achieve the emission reduction target but also minimize the negative impact on the macroeconomy however the proper level of the carbon tax varies by building stage under the proper carbon tax level the peak of carbon emissions could be reached in 2025 the main purpose of this paper is to provide a theoretical basis for the government in formulating different energy policies

on two definitions of productivity abstract caves et al in 1982 introduced a productivity measure that does not proceed from a continuous timer presentation they named these indexes after sten malmquist who in 1953 used ratios of distance functions to formulate quantity indexes in the consumer context in a later paper diewert proposed an alternative definition of productivity also based on distance functions which he attributed to hicks and moorsteen in this letter we provide necessary and sufficient conditions for the malmquist productivity index to equal the hicks moorsteen index

a choice experiment on fuel taxation and earmarking in norway abstract pigouvian taxes are efficient but unpopular among voters and hence often politically infeasible earmarking of revenues has been widely reported to increase public support for taxes but earmarking is generally not the most efficient use of the revenues this trade off between efficiency and political feasibility is the motivation for our primary research objective to quantify the effect of earmarking on support for fuel tax rises our secondary research objective is to investigate why earmarking increases support using data from a representative sample of the norwegian voter population n 1147 we estimate models of voter preferences for fuel taxes using logistic regression models our results show that in the absence of earmarking the majority of voters would like to reduce fuel taxes but earmarking the revenues for environmental measures has a substantial effect on voter support for fuel tax increases garnering a majority for increases of up to 15 above present levels further analysis indicates that a prime reason why earmarking for environmental measures is popular is that it increases the perceived environmental effectiveness of the tax and hence its legitimacy as an environmental rather than a fiscal policy instrument

group strategyproof cost sharing the role of indifferences every agent reports his willingness to pay for one unit of a good a mechanism allocates goods and cost shares to some agents we characterize the group strategyproof gsp mechanisms under two alternative continuity conditions interpreted as tie breaking rules with the maximalist rule max an indifferent agent is always served with the minimalist rule min an indifferent agent does not get a unit of the good gsp and max characterize the cross monotonic mechanisms these mechanisms are appropriate whenever symmetry is required on the other hand gsp and min characterize the sequential mechanisms these mechanisms are appropriate whenever there is scarcity of the good our results are independent of an underlying cost function they unify and strengthen earlier results for particular classes of cost functions

consumers industrialists and the political economy of green taxation co2 taxation in oecd abstract economists have traditionally suggested that politicians should simply impose a uniform tax on harmful emissions as the first best solution prescribes however a detailed analysis of the actual design of green taxes in the oecd reveals that they are differentiated and far from this first best optimal design public choice theory suggests that an important reason that industry as a group in contrast to households is capable of lobbying against green taxation the paper presents empirical findings on co2 taxation within the oecd countries which confirm this theoretical prediction taxes are not uniform and households pay a tax rate which is six times higher than that paid by the industry on average even when tax revenue is fully refunded to industry the potential losers energy intensive firms will lobby harder against it than the potential winners labor intensive firms due to small group advantages the norwegian case confirms these arguments finally it is suggested that a co2 tax may perhaps successfully be applied to households because they tend to be badly organized as such a mix of green taxes in relation to non organized interests and grandfathered permit markets in relation to organized interests should be considered in the search for cost effective and politically feasible instruments

modularity and greed in double auctions abstract designing double auctions is a complex problem especially when there are restrictions on the sets of buyers and sellers that may trade with one another the goal of this paper is to develop a modular approach to the design of double auctions by relating it to the exhaustively studied problem of designing one sided mechanisms with a single seller or alternatively a single buyer we consider several desirable properties of a double auction feasibility dominant strategy incentive compatibility the still stronger incentive constraints offered by a deferred acceptance implementation exact and approximate welfare maximization and budget balance for each of these properties we identify sufficient conditions on two one sided algorithms one for ranking the buyers one for ranking the sellers and on a method for their composition into trading pairs which guarantee the desired property of the double auction our framework also offers new insights into classic double auction designs such as the vcg and mcafee auctions with unit demand buyers and unit supply sellers

issues in the design of environmental excise taxes t ax law has long had environmental consequences although the consequences have often been unintended for example tax provisions passed to assist the timber industry in the 1920s permitted expensing of the costs of reforestation and planting rather than having to depreciate them over a period of time along with capital gains treatment for harvested timber provisions which may have encouraged a more rapid harvest of domestic timberland percentage depletion allowances to assist the oil industry a deduction based on a percentage of the value of oil sold rather than the taxpayer s basis in the oil which became part of the internal revenue code in 1926 arguably have led to exploitation of oil and mineral deposits at a rate greater than the socially optimal rate similarly the purpose of the federal motor fuels tax when expanded in 1956 was to fund highway construction although now it is common to regard it as at least potentially an environmental tax aimed at addressing the externalities caused by automobile use of course these tax provisions were not motivated by environmental concerns the 1970s began to see efforts at environmental tax policy although at the time the focus of the policies more often was energy conservation rather than reduction in pollution between 1978 and 1986 congress provided tax credits for residential energy conservation expenditures in 1978 congress enacted the gas guzzler excise tax an excise tax that varies with the environmental protection agency s fuel economy rating of automobiles it remains in force today congress also made available tax exempt bond finance for pollution control equipment between 1978 and 1986

pollution tax heuristics an empirical study of willingness to pay higher gasoline taxes economists widely agree that in concept pollution taxes are the most cost effective means of reducing pollution with the advent of monitoring and enforcement technologies the case for pollution taxation is generally getting stronger on the merits despite widespread agreement among economists however pollution taxes remain unpopular especially in north america some oppose pollution taxes because of a suspicion that government would misspend the tax proceeds while others oppose pollution taxes because they would impose economic hardships upon certain individuals groups or industries and there is no pollution tax more pathologically hated as the gasoline tax this is unfortunate from an economic perspective as a gasoline tax is easy to implement and is a reasonable pigouvian tax scaling proportionately with the harms of consumption surprisingly there is a dearth of theory explaining this cleave between economists and virtually everybody else drawing on behavioralist literatures this paper introduces several theories as to why people and governments so vehemently oppose pollution taxes using the example of gasoline taxes we provide some empirical evidence for these theories we also show that revenue recycling the use of tax proceeds to reduce other taxes is an effective means of reducing opposition to gasoline taxes

technical efficiency and productivity analysis in indonesian provincial economies this article estimates inefficiency and total factor productivity tfp across indonesian provinces from 1993 to 2000 indonesia is a large emerging market economy but provinces within the country due to the island structure of the country are more distinct from one another compared to other countries we use a stochastic frontier methodology to estimate inefficiency and tfp we find that tfp fell by an average rate of 7 5 across provinces due to the decrease in technical efficiency in fact the majority of output growth within indonesia is explained by the accumulation of inputs in this sense economic growth within indonesia does not appear to be sustainable without reversing these trends

another look at growth and defense in less developed countries lim challenges evidence showing that defense spending encouraged the economic growth of 44 less developed countries ldcs over the 1950 65 periods by reexamining the relationship between defense and growth for 54 ldcs over the 1965 73 period regional analyses cover 21 african 13 western hemisphere 11 asian and 9 middle eastern and southern european ldcs the results show that defense spending was detrimental to economic growth although adverse effects that were marked in africa and the western hemisphere were absent in asia the middle east and southern eurpoe 4 references 2 tables

economic growth and defense spending granger causality abstract this paper uses granger causality to check the assumed exogeneity of military spending relative to economic growth in previous studies of the relationship between economic growth and military spending the test results performed using two measures of military spending consistently show that military spending is not a strongly exogenous variable implying that previous work in this area is flawed

sources of productivity growth using the fare primont decomposition an empirical application to the irish beef sector several competing methodologies for tfp estimation have been developed in the past decades a popular approach in the literature is index number computation the most widely implemented tfp indices

productivity of public spending sectoral allocation choices and economic growth the authors examine the composition of public spending and its implications for economic growth they use a translog production function by treating gross domestic product as the output and labor private capital and several types of public sector capital stocks as the inputs using time series data for 25 countries for 1965 84 the production functions of all but four countries exhibited increasing returns to scale the highest output elasticity was for human resource development capital followed by private capital and labor output elasticity of infrastructure capital was found to be relatively small with the exception of latin american countries where it exhibited relatively high values military capital had negative output elasticity in slightly more than half of the cases considered the results suggest that reshaping public spending priorities in favor of human resource development and away from military spending would positively stimulate world economic renewal

beyond moulin mechanisms abstract the only known general technique for designing truthful and approximately budget balanced cost sharing mechanisms with good efficiency or computational complexity properties is due to moulin 1999 incremental cost sharing characterization by coalition strategy proofness soc choice welfare 16 2 279 320 for many fundamental cost sharing applications however moulin mechanisms provably suffer from poor budget balance poor economic efficiency or both we propose acyclic mechanisms a new framework for designing truthful and approximately budget balanced cost sharing mechanisms acyclic mechanisms strictly generalize moulin mechanisms and offer three important advantages first it is easier to design acyclic mechanisms than moulin mechanisms many classical primal dual algorithms naturally induce a non moulin acyclic mechanism with good performance guarantees second for important classes of cost sharing problems acyclic mechanisms have exponentially better budget balance and economic efficiency than moulin mechanisms finally while moulin mechanisms have found application primarily in binary demand games we extend acyclic mechanisms to general demand games a multi parameter setting in which each bidder can be allocated one of several levels of service