commodity price shocks and civil conflict evidence from colombia how do income shocks aect armed con ict theory suggests two op posite eects if labor is used to appropriate resources violently higher wages may lower con ict by reducing labor supplied to appropriation this is the opportunity cost eect alternatively a rise in contestable income may increase violence by raising gains from appropriation this is the rapacity eect our paper exploits exogenous price shocks in inter national commodity markets and a rich dataset on civil war in colombia to assess how dierent income shocks aect con ict we examine changes in the price of agricultural goods which are labor intensive and natural resources which are capital intensive we focus on coee and oil the two largest exports we nd that a sharp fall in coee prices in the 1990s increased violence dierentially in regions growing more coee by lower ing wages and the opportunity cost of joining armed groups in contrast a rise in oil prices increased violence dierentially in the oil region by in creasing municipal revenue siphoned through rapacity this pattern holds in several other agricultural and natural resource sectors providing robust evidence that price shocks aect con ict in opposite directions depending on the factor intensity of the commodity

bank risk taking securitization supervision and low interest rates evidence from the euro area and the u s lending standards using a unique dataset of the euro area and the u s bank lending standards we find that low monetary policy short term interest rates soften standards for household and corporate loans this softening especially for mortgages is amplified by securitization activity weak supervision for bank capital and low monetary policy rates for an extended period conversely low long term interest rates do not soften lending standards finally countries with softer lending standards before the crisis related to negative taylor rule residuals experienced a worse economic performance afterward these results help shed light on the origins of the crisis and have important policy implications the author 2011 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

the evolution of high incomes in northern america lessons from canadian evidence this paper uses tax statistics to construct new series on canadian top income shares from 1920 to 2000 and provides a systematic comparison with the u s experience as in the united states top income shares in canada display a ushaped pattern over the century with a precipitous drop during world war ii followed by a slower decline until 1970 since the late 1970s top income shares have been increasing dramatically and the very top shares are now as high as in the pre war era as in the united states the recent increase in top income shares is the consequence of a surge in top wages and salaries the canadian experience since the late 1970s does not appear to be well explained by tax changes suggesting that the upward trend in canada derives from the united states perhaps because many high income canadians have an emigration option this in turn suggests that the recent increase in u s personal income top shares is not merely a change in tax reporting behavior the recent sharp increase in top income shares in canada is of the same magnitude at the individual and family level and is not due to an increase in income mobility

farming or fighting agricultural price shocks and civil war in africa this article links lower economic returns in the labor intensive agricultural sector to a higher risk of armed conflict at the local level it argues that income shocks followed by rising unemployment and lower wages in the rural economy facilitate rebel recruitment and strengthen civilian support for rebel movements focusing on africa the article introduces a location specific measure of changes to the value of local agricultural output by combining sub national crop production maps with data on movements in global agricultural prices the results show that negative changes to the local agricultural price index significantly and substantially increase the risk of violent events

the incidence of income taxes on high earners in canada this article explores the brain drain explanation for the concentration of incomes in canada during the past 30 years namely that high skilled canadians make use of high salaries on offer in the united states to extract higher salaries at home if this is the case then for a given level of us salaries the threat to accept outside offers should be more credible when the canadian dollar is depreciating against the us dollar and weaker when the canadian dollar is appreciating the data are broadly consistent with this claim income concentration worsened during the depreciations of the 1980s and 1990s and eased when the canadian dollar began to appreciate in value the article develops a simple two parameter model based on the propositions that high earners in canada can use us salaries to bargain for higher salaries and that canadian high earners can shelter part of their income from personal income taxes it also offers some preliminary evidence about the parameter values consistent with available data the results suggest that higher top marginal personal income tax rates may potentially accentuate top end after tax income inequality if high earners are able to use their bargaining power to extract pay increases to offset higher tax rates then the burden of increased personal income taxes will be deflected elsewhere and may even have the perverse effect of making the after tax income distribution more unequal than it was before l incidence des impots sur le revenu des hauts salaries au canada cet article examine l hypothese des produits de base produits de base produits de base produits de base produits de base fuites des cerveaux comme explication pour la concentration des revenus au canada pendant les dernieres decennees c est a dire que les canadiens hautement qualifies se servent des salaires offerts aux etats unis pour negocier des salaires plus eleves au canada si tel est le cas la menace d emigrer aux etats unis est plus credible lorsque le dollar canadien deprecie contre le dollar americain et elle est moins credible pendant une appreciation les grandes lignes des variations des donnees vont dans le sens de cette conjecture la concentration des revenus a accru pendant les depreciations des annees 1980 et 1990 et cette tendance a renverse la direction suite a l appreciation du dollar canadien l article developpe un modele a deux parametres base sur les propositions que les hauts salaries au canada peuvent utiliser les salaires aux etats unis afin de negocier des salaires plus eleves et que les hauts salaries se servent de la planification fiscale afin de mettre une partie de leurs revenus a l abri des impots des estimations preliminaires pour les parametres sont presentees les resultats suggerent qu une augmentation du taux marginal d imposition pourrait meme accentuer l inegalite des revenus apres impots si les hauts salaries sont capables de negocier des salaires plus eleves face aux augmentations des taux d imposition le fardeau du nouvel impot serait refile ailleurs la distribution des revenus nets pourrait meme devenir encore plus inegale

from theory to practice canadian economists contributions to public finance we survey canadian economists contributions to the field of public finance from the mid 1980s to 2016 we highlight the development and extension of the models and tools of public economics and the empirical studies that have deepened our understanding of the efficiency and distributional issues over a wide range of public finance issues we also highlight contributions to the development of policies through commissioned reports and the important role that canadian institutions the canadian tax foundation the think tanks and the federal and provincial departments of finance have played in shaping tax and fiscal policies de la theorie a la pratique contributions des economistes canadiens a la finance publique on examine les contributions des economistes canadiens au domaine de la finance publique du milieu des annees 1980 a 2016 on souligne le developpement et l extension des modeles et des outils d economie publique et les etudes empiriques qui ont aide a approfondir notre comprehension des enjeux d efficacite et de distribution dans un vaste eventail de questions de finance publique on souligne aussi les contributions des rapports commandites au developpement de politiques publiques ainsi que le role important d institutions canadiennes l association canadienne d etudes fiscales les groupes d experts ainsi que les ministeres des finances du gouvernement federal et des gouvernements provinciaux dans le design des politiques fiscales

mercantilism as strategic trade policy the anglo dutch rivalry for the east india trade this paper interprets seventeenth century mercantilism in light of recent theories of strategic trade policy long distance international commerce during the mercantilist period was undertaken chiefly by state chartered monopoly trading companies and was therefore conducted under conditions of imperfect competition the economic structure of the anglo dutch rivalry for the east india trade provides an excellent illustration of an environment in which the profit sharting motive for strategic trade policies exists dutch supremacy in the early east india trade was facilitated by a managerial incentive scheme in the monopoly charter that enabled it to achieve a stackelberg leadership position against the english using data from the east india trade around 1620 in a cournot duopoly model i find that the managerial incentives yielded greater dutch profits than would have been obtained from a standard profit maximizing objective and that the scope for other strategic trade policies was clearly present

the optimal elasticity of taxable income abstract the strength of the behavioral response to a tax rate change depends on the environment individuals operate in and may be manipulated by instruments controlled by the government we first derive a measure of the social benefit to affecting this elasticity the paper then examines this effect in the solution to the optimal income taxation problem when such an instrument is available first in a general model and then in an example when the government chooses the income tax base

international commodity prices growth and the outbreak of civil war in sub saharan africa to learn more about the effect of economic conditions on civil war we examine whether sub saharan civil wars are more likely to start following downturns in the international price of countries main export commodities the data show a robust effect of commodity price downturns on the outbreak of civil wars we also find that sub saharan countries are more likely to see civil wars following economic downturns in their main oecd export destinations

oil and the macroeconomy since world war ii all but one of the u s recessions since world war ii have been preceded typically with a lag of around three fourths of a year by a dramatic increase in the price of crude petroleum this does not mean that oil shocks caused these recessions evidence is presented however that even over the period 1948 72 this correlation is statistically significant and nonspurious supporting the proposition that oil shocks were a contributing factor in at least some of the u s recessions prior to 1972 by extension energy price increases may account for much of post opec macroeconomic performance

strategic export promotion in the absence of government precommitment arguments in favor of a strategic trade policy are based on the assumption that the government can credibly precommit to a policy that will not be altered even if it is suboptimal ex post this paper examines the implications of relaxing this assumption to this end a three stage game is considered that accounts for the sunk costs associated with capacity installment it is found that contrary to common belief the time consistent optimal subsidy level is positive though generally lower than the optimal level with precommitment this somewhat counterintuitive result is driven by the commitment value of capacity copyright 1995 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

lenders on the storm of wholesale funding shocks saved by the central bank abstractwe provide empirical evidence on banks responses to shocks in the wholesale funding market using data of 181 euro area banks over the period from august 2007 to june 2013 responses to funding liquidity shocks for both banks lending volumes and loan rates to households and corporates are analysed in a panel var framework we thereby distinguish banks by country extent of eurosystem borrowing bank size and capitalization the results show that shocks in the securities and interbank markets have significant effects on loan rates and credit supply particularly of banks in stressed countries of the periphery the results also suggest that central bank liquidity has mitigated this effect on lending volumes lending to nonfinancial corporations is more sensitive to wholesale funding shocks than lending to households lending volumes of large banks that are typically more dependent on wholesale funding and banks with large exposure to sovereign bonds show stronger responses to wholesale funding s

strategic managerial incentives in a two period cournot duopoly abstract this paper examines the nature of optimal managerial incentives in the context of a duopoly marked by competition between the firm s managers in a dynamic production environment if the marginal cost of production falls moderately over time or remains unchanged there exists an equilibrium where one owner requires her manager to maximize profit whereas the rival owner requires her manager to maximize sales revenue the profit maximizing manager turns his firm into a stackelberg leader while the sales revenue maximizing manager turns his firm into a stackelberg follower further the profit maximizing manager may generate a larger firm profit relative to the sales revenue maximizing manager

income inequality in the united states 1913 1998 this paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the united states using individual tax returns data top income and wages shares display a u shaped pattern over the century our series suggest that the large shocks that capital owners experienced during the great depression and world war ii have had a permanent effect on top capital incomes we argue that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks top wage shares were flat before world war ii dropped precipitously during the war and did not start to recover before the late 1960s but are now higher than before world war ii as a result the working rich have replaced the rentiers at the top of the income distribution

the interest rate pass through in the euro area during the sovereign debt crisis abstract we investigate the pass through of monetary policy to bank lending rates in the euro area during the sovereign debt crisis in comparison to the pre crisis period we make the following contributions first we use a factor augmented vector autoregression which allows us to assess the responses of a large number of country specific interest rates and spreads second we analyze the effects of monetary policy on the components of the interest rate pass through which reflect banks funding risk including sovereign risk and markups charged by banks over funding costs third we not only consider conventional but also unconventional monetary policy we find that while the transmission of conventional monetary policy to bank lending rates has not changed with the crisis the composition of the pass through has changed specifically expansionary conventional monetary policy lowered sovereign risk in peripheral countries and longer term bank funding risk in peripheral and core countries during the crisis but has been unable to lower banks markups this was not or not as much the case prior to the crisis unconventional monetary policy helped decreasing lending rates mainly due to large shocks rather than a strong propagation

explaining the african food riots of 2007 2008 an empirical analysis abstract a sharp escalation in worldwide commodity prices precipitated the global food crisis of 2007 2008 affecting the majority of the world s poor causing protests in developing countries and presenting policymakers with the challenge of simultaneously addressing hunger poverty and political instability these food price shocks fomented violent civil responses in some countries but not others offering a unique opportunity to assess the factors that contributed to these disturbances we explore this question empirically with specific reference to africa where food riots occurred in at least 14 countries by examining the socio economic and political conditions facing african countries we attempt to answer why only some countries in africa witnessed food riots in late 2007 and early 2008 while others did not our empirical analysis demonstrates that higher levels of poverty as proxied by the human poverty index restricted access to and availability of food urbanization a coastal location more oppressive regimes and stronger civil societies are associated with a higher likelihood of riots occurring we also examine three country cases egypt mozambique niger which represent different circumstances and responses to the food crisis and identify specific factors that were associated with food protests in each case our study highlights the importance of pro poor policies and investments and improved governance in addressing the problems facing the poor and in helping secure political stability as the frequency and variability of natural disasters increase in response to climate change such policies can serve to protect the poor from the debilitating consequences of the resulting shocks

top income shares in canada recent trends and policy implications according to canadian taxfiler data over the last thirty years there has been a surge in the income shares of the top 1 top 0 1 and top 0 01 of income recipients even with longitudinal smoothing by individual using three or five year moving averages top shares fell in 2008 and 2009 but only by a fraction of the overall surge alberta british columbia and ontario have much more pronounced surges than other provinces part of the canadian surge is likely attributable to u s factors but a comprehensive explanation remains elusive even so i draw implications for policies that might achieve some support from across the political spectrum including the elimination of tax preferences that favour those with high incomes the promotion of shareholder democracy and to maintain canada s relatively high intergenerational mobility continued wide accessibility to healthcare and education

rising food prices food price volatility and social unrest can food prices cause social unrest throughout history riots have frequently broken out ostensibly as a consequence of high food prices using monthly data at the international level this article studies the impact of food prices food price levels as well as food price volatility on social unrest because food prices and social unrest are jointly determined data on natural disasters are used to identify the causal relationship flowing from food price levels to social unrest results indicate that for the period 1990 2011 food price increases have led to increases in social unrest whereas food price volatility has not been associated with increases in social unrest these results are robust to alternative definitions of social unrest to using real or nominal prices to using commodity specific price indices instead of aggregated price indices to alternative definitions of the instrumental variable to alternative definitions of volatility and to controlling for non food related social unrest

monetary transmission in the euro area early evidence monetary transmission evidence we examine the euro area monetary policy transmission process using post 1999 data with two main questions in mind has it changed after and because of economic and monetary union emu and if so is it becoming homogeneous across countries given the data limitations we concentrate on three components of the transmission mechanism the banking the interest rate and the asset market channels we find evidence that the transmission through banks has become more potent and homogeneous across countries on the financial market channels our evidence is somewhat weaker but suggestive the interest rate channel appears to have changed even before emu and now affects national economies in a broadly similar way the asset market channel proxied by the stock market effects of monetary policy also seems to work rather homogeneously across national markets no comparison with pre emu is available here a positive answer to both questions raised above represents in our view the best working hypothesis under current knowledge ignazio angeloni and michael ehrmann

the effect of marginal tax rates on taxable income a panel study of the 1988 tax flattening in canada abstract federal tax reform in 1988 flattened the canadian personal income tax schedule changing the marginal tax rates for many individuals using methods similar to those applied by auten and carroll rev econ 81 4 1999 681 in the study of the effects of the 1986 u s tax reform act we estimate the responsiveness of income to changes in taxes to be substantially smaller in canada however we find evidence of a much higher response in self employment income in the labor income of seniors and from those with high incomes

the impact of food prices on conflict revisited abstractstudies that examine the impact of food prices on conflict usually assume that all changes in international food prices are exogenous shocks for individual countries or local areas by is

the elasticity of taxable income with respect to marginal tax rates a critical review this paper critically surveys the large and growing literature estimating the elasticity of taxable income with respect to marginal tax rates using tax return data first we provide a theoretical framework showing under what assumptions this elasticity can be used as a sufficient statistic for efficiency and optimal tax analysis we discuss what other parameters should be estimated when the elasticity is not a sufficient statistic second we discuss conceptually the key issues that arise in the empirical estimation of the elasticity of taxable income using the example of the 1993 top individual income tax rate increase in the united states to illustrate those issues third we provide a critical discussion of selected empirical analyses of the elasticity of taxable income in light of the theoretical and empirical framework we laid out finally we discuss avenues for future research jel h24 h31 j22

interest rate pass through a meta analysis of the literature the interest rate pass through describes how changes in a reference rate the monetary policy money market or t bill rate transmit to bank lending rates this paper reviews the empirical literature on the interest rate pass through and systematizes it by means of meta analysis and meta regressions the paper finds systematically lower estimated pass through coefficients in studies that focus on transmission to long term lending rates consumer lending rates and average lending rates the interest rate pass through is significantly influenced by country macro financial and institutional factors the estimated pass through tends to be stronger for economies with deeper capital markets measured by market capitalization interestingly central bank independence rising from lower levels can reduce interest rate pass through while central bank independence rising from already high levels can boost the pass through

state capacity conflict and development the absence of state capacities to raise revenue and to support markets is a key factor in explaining the persistence of weak states this paper reports on an ongoing project to investigate the incentive to invest in such capacities the paper sets out a simple analytical structure in which state capacities are modeled as forward looking investments by government the approach highlights some determinants of state building including the risk of external or internal conflict the degree of political instability and dependence on natural resources throughout we link these state capacity investments to patterns of development and growth

the effect of marginal tax rates on taxable income a panel study of the 1986 tax reform act this paper uses a treasury department panel of more than 4 000 taxpayers to estimate the sensitivity of taxable income to changes in tax rates on the basis of a comparison of the tax returns of the same individual taxpayers before and after the 1986 tax reform the analysis emphasizes that the response of taxable income involves much more than a change in the traditional measures of labor supply the evidence shows an elasticity of taxable income with respect to the marginal net of tax rate that is at least one and could be substantially higher the implications for recent tax rate changes are discussed

competition transmission and bank pricing policies evidence from belgian loan and deposit markets abstract this paper addresses the pass through from market interest rates to retail bank interest rates the paper advocates a heterogeneous approach and applies it to the belgian banking market a substantial proportion of the heterogeneity in bank pricing policies can be explained by the bank lending channel and the relative market power hypothesis the results also suggest that the long term pass through is typically less than one for one rejecting the completeness hypothesis while there is no convincing evidence for asymmetry in retail rates large deviations from equilibrium mark ups are faster reduced than small deviations overall conditions for corporate loans are more competitive compared to consumer loans demand and savings deposits have by far the most rigid prices

the transmission mechanism of credit support policies in the euro area abstract we use an original monthly dataset of 131 banks to examine the effectiveness and transmission mechanism of the eurosystem s credit support policies in the wake of the banking and sovereign debt crisis first we show that these policies were indeed succesful in stimulating the credit flow of banks to the private sector second we find support for the bank lending view of monetary transmission specifically the policies had a greater impact on loan supply of banks that were more constrained to obtain unsecured external funding i e small banks size effect banks with less liquid balance sheets liquidity effect banks that depended more on wholesale funding retail effect and low capitalized banks capital effect the role of bank capital was however ambiguous besides the above favorable direct effect on loan supply lower levels of bank capitalization at the same time mitigated the size retail and liquidity effects of the policies the drag on the other channels was even dominant i e better capitalized banks responded on average more to the credit support policies of the eurosystem as a result of more favourable size retail and liquidity effects

top incomes in the long run of history a recent literature has constructed top income shares time series over the long run for more than twenty countries using income tax statistics top incomes represent a small share of the population but a very significant share of total income and total taxes paid hence aggregate economic growth per capita and gini inequality indexes are sensitive to excluding or including top incomes we discuss the estimation methods and issues that arise when constructing top income share series including income definition and comparability over time and across countries tax avoidance and tax evasion we provide a summary of the key empirical findings most countries experience a dramatic drop in top income shares in the first part of the twentieth century in general due to shocks to top capital incomes during the wars and depression shocks top income shares do not recover in the immediate postwar decades however over the last thirty years top income shares have increased substantially in english speaking countries and in india and china but not in continental european countries or japan this increase is due in part to an unprecedented surge in top wage incomes as a result wage income comprises a larger fraction of top incomes than in the past finally we discuss the theoretical and empirical models that have been proposed to account for the facts and the main questions that remain open

effects of international food price shocks on political institutions in low income countries evidence from an international food net export price index we examine the effects of variations in the international food prices on political institutions in low income countries our empirical analysis exploits that the economic impact of changes in the international food prices differs across countries depending on whether countries are net food importers or exporters we construct an international food net export price index that captures this heterogeneity our panel fixed effects analysis yields that in low income countries within country variations in the international food net export price index are significantly negatively related to democratic institutions we further explore the mechanisms driving this relationship along the economic and the conflict dimensions

the strategic choice of managerial incentives do firms with separate owners and managers maximize profits we address this question for an oligopoly where managers compete in quantities or prices as in the cournot or bertrand models and owners choose their managers incentives we find that there is a strategic aspect in the problem of selecting incentives and that profit maximizing behavior does not result in particular in the oligopoly we study the behavior of firms competing in quantity price more closely resembles perfectly competitive collusive behavior than cournot bertrand behavior

the economic origins of conflict in africa we study the impact of global food price shocks on local violence across africa in food producing areas higher prices reduce conflict over the control of territory factor conflict and increas

mending the broken link heterogeneous bank lending rates and monetary policy pass through abstract we analyse the pass through of monetary policy measures to lending rates to households and firms in the euro area using novel bank level datasets banks characteristics such as the capital ratio exposure to domestic sovereign debt percentage of non performing loans and stability of funding structure are responsible for the heterogeneity in the pass through of conventional monetary policy changes the location of a bank is irrelevant non standard measures reduce lending rate heterogeneities banks located in financially stressed countries and with weak balance sheets are most affected banks lending margins have fallen considerably

interest rate pass through since the euro area crisis abstract the financial crisis has been characterised by fragmentation in the transmission of monetary policy as reflected in the high dispersion in interest rates on bank loans to euro area firms heterogeneity in interest rate pricing also emerged within countries suggesting that macroeconomic differences were not the only driver of dispersion using individual bank data for twelve euro area countries covering almost a decade since the start of the crisis we identify the balance sheet characteristics that contributed to this fragmentation and document the share of the deviation in interest rates from policy rates that is accounted for by each characteristic interest rate pass through heterogeneity is estimated using an error correction framework that accounts for macroeconomic variation and market structure and includes standard bank characteristics such as size capital and liquidity as well as variables that capture banks funding access risk and asset quality results show incomplete pass through of changes in money market rates targeted by the central bank to firms lending rates sovereign bond yields are shown to affect the cost of finance for firms particularly in stressed countries and market concentration is associated with smaller reductions in lending rates with regard to bank characteristics asset impairment leads to a significant decrease in pass though bank size as a proxy for market power and reliance on central bank funding affect pass through for smaller loans while capital is more significant for larger loans

is economic recovery a myth robust estimation of impulse responses we estimate the impulse response function irf of gdp to a banking crisis using an extension of the local projections method we demonstrate that though robust to misspecifications of the data generating process this method suffers from a hitherto unnoticed bias which increases with the forecast horizon we propose a correction to this bias and show through simulations that it works well applying our corrected local projections estimator to the data from a panel of 99 countries observed between 1974 and 2001 we find that an average banking crisis yields a gdp loss of just under 10 in 10 years with little sign of recovery like the original local projections method our extension of it is widely applicable

are government spending multipliers greater during periods of slack evidence from 20th century historical data a key question that has arisen during recent debates is whether government spending multipliers are larger during periods of slack some researchers and policymakers have argued that while government spending multipliers are estimated to be modest on average they might become greater during times when resources are underutilized auerbach and gorodnichenko 2012 forthcoming henceforth ag test this hypothesis and find larger multipliers dur

ex tridenti mercatus sea power and maritime trade in the age of globalization this paper tests an implication of the hypothesis that hegemons provide increased global stability and thus promote international commerce specifically we measure the influence of naval power projections on global trade during the latter 19th and early 20th centuries a time of relative peace and robust commercial activity we use archival data on the navies of britain france the united states and germany capturing longitudinal measures of ship deployment tonnage and ship personnel first we develop an empirical naval arms race model and demonstrate that the navies of britain and france in particular responded rigorously to each other we then use our estimates of naval power projected around the world by britain and france to measure their effects on bilateral trade in a panel data gravity model results indicate that while navies had some positive impact on their own nation s trade other nations trade suffered our results show that rather than bolster globalization the first global arms race damaged commercial interests and lowered trade potential around the world

impact of bank competition on the interest rate pass through in the euro area this article analyses the impact of loan market competition on the interest rates applied by euro area banks to loans during the period 1994 2004 using a novel measure of competition called the boone indicator we find evidence that stronger competition implies significantly lower spreads between bank and market interest rates for most loan market products in line with expectations this result implies that stronger competition causes both lower bank interest rates and a stronger pass through of market rate changes into bank rates evidence of the latter is also presented by our error correction model ecm for bank rates further banks compensate income losses from increased loan market competition by offering lower deposit rates our findings with respect to the loan market rates have important monetary policy implications as they suggest that measures to promote competition in the european banking sector are likely to render the monetary policy transmission mechanism more effective

dynamic analysis in the viner model of mercantilism abstract this paper models the central theme of mercantilism in jacob viner s interpretation power vs plenty in a framework of modern theory of international finance it is shown that in the viner model of mercantilism a nation with strong mercantilist sentiment ends up with large foreign asset accumulation and high consumption in the long run an import tariff leads to more foreign asset holding and more total consumption furthermore in the viner model the harberger laursen metzler effect exists unambiguously a permanent terms of trade deterioration causes a current account deficit in the short run

the case for a progressive tax from basic research to policy recommendations the fair distribution of the tax burden has long been a central issue in policyhe fair distribution of the tax burden has long been a central issue in policymaking a large academic literature has developed models of optimal tax making a large academic literature has developed models of optimal tax theory to cast light on the problem of optimal tax progressivity in this theory to cast light on the problem of optimal tax progressivity in this paper we explore the path from basic research results in optimal tax theory to paper we explore the path from basic research results in optimal tax theory to formulating policy recommendations formulating policy recommendations models in optimal tax theory typically posit that the tax system should maximize a models in optimal tax theory typically posit that the tax system should maximize a social welfare function subject to a government budget constraint taking into account social welfare function subject to a government budget constraint taking into account that individuals respond to taxes and transfers social welfare is larger when resources that individuals respond to taxes and transfers social welfare is larger when resources are more equally distributed but redistributive taxes and transfers can negatively are more equally distributed but redistributive taxes and transfers can negatively affect incentives to work save and earn income in the fi rst place this creates the clasaffect incentives to work save and earn income in the fi rst place this creates the classical trade off between equity and effi ciency which is at the core of the optimal income sical trade off between equity and effi ciency which is at the core of the optimal income tax problem in general optimal tax analyses maximize social welfare as a function of tax problem in general optimal tax analyses maximize social welfare as a function of individual utilities the sum of utilities in the utilitarian case the marginal weight for individual utilities the sum of utilities in the utilitarian case the marginal weight for a given person in the social welfare function measures the value of an additional dollar a given person in the social welfare function measures the value of an additional dollar of consumption expressed in terms of public funds such welfare weights depend on of consumption expressed in terms of public funds such welfare weights depend on the level of redistribution and are decreasing with income whenever society values the level of redistribution and are decreasing with income whenever society values more equality of income therefore optimal income tax theory is fi rst a normative more equality of income therefore optimal income tax theory is fi rst a normative theory that shows how a social welfare objective combines with constraints arising from theory that shows how a social welfare objective combines with constraints arising from limits on resources and behavioral responses to taxation in order to derive specifi c limits on resources and behavioral responses to taxation in order to derive specifi c

taxation and top incomes in canada we estimate the elasticity of reported income with respect to tax rates for high earners using sub national variation across canadian provinces we argue this allows for better identification of tax elasticities than the existing literature we find that elasticities of reported income at the provincial level are large for incomes in the top 1 but small for lower earners there are strong indications that the response happens both through earned and capital income while our estimated elasticities are large changes in tax rates cannot explain much of the overall long run trend of higher income concentration in canada resume fiscalite et revenus les plus eleves au canada les auteurs evaluent l elasticite du revenu declare par rapport aux taux d imposition pour les revenus les plus eleves en utilisant les variations intra nationales a travers les provinces du canada ils suggerent que cela produit une meilleure identification des elasticites que ce que contient la litterature pour le moment on decouvre que les elasticites du revenu declare sont elevees pour les 1 au sommet mais faibles pour les revenus plus bas il appert fortement que la reponse se produit tant pour les revenus gagnes que pour les revenus d investissement meme si les elasticites mesurees sont elevees les changements dans les taux d imposition ne peuvent pas expliquer beaucoup de la tendance a long terme vers une plus forte concentration des hauts revenus au canada

were there regime switches in u s monetary policy working paper 2004 14 june 2004 abstract a multivariate model identifying monetary policy and allowing for simultaneity and regime switching in coefficients and variances is confronted with u s data since 1959 the best fit is with a model that allows time variation in structural disturbance variances only among models that also allow for changes in equation coefficients the best fit is for a model that allows coefficients to change only in the monetary policy rule that model allows switching among three main regimes and one rarely and briefly occurring regime the three main regimes correspond roughly to periods when most observers believe that monetary policy actually differed and the differences in policy behavior are substantively interesting though statistically ill determined the estimates imply monetary targeting was central in the early 80s but was also important sporadically in the 70s the changes in regime were essential neither to the rise in inflation in the 70s nor to its decline in the 80s jel classification e52 e47 c53 key words counterfactuals lucas critique policy rule monetary targeting simultaneity volatility model comparison i the debate over monetary policy change in an influential paper clarida gali and gertler 2000 cgg presented evidence that us monetary policy changed between the 1970 s and the 1980 s indeed that in the 70 s it was drastically worse they found that the policy rule apparently followed in the 70 s was one that when embedded in most stochastic general equilibrium models would imply non uniqueness of the equilibrium and hence vulnerability of the economy to sunspot fluctuations of arbitrarily large size their estimated policy rule for the later period on the other hand eliminated this indeterminacy these results are a possible explanation of the volatile and rising inflation of the 70 s and of its subsequent decline the cgg analysis has two important weaknesses one is that it fails to account for stochastic volatility us macroeconomic variables and particularly the federal funds rate have gone through periods of tranquility and of agitation with forecast error variances varying greatly from period to period ignoring such variation does not lead to inconsistent estimates of model parameters when the forecasting equations themselves are constant but it strongly biases toward a finding of changed parameters tests of the stability of the forecasting equations the other weakness is that the cgg analysis rests on powerful and implausible identifying assumptions they require that we accept that the response of the monetary authority to expected future inflation and output does not depend on the recent history of inflation money growth or output it is hard to understand why this should be so especially in the 70 s when monetarism was a prominent theme in policy debates congress was requiring reports from the fed of projected time paths of monetary aggregates and financial markets were reacting sensitively to weekly money supply numbers the requirement for existence and uniqueness of equilibrium in dynamic models is that the monetary policy rule show a more than unit response of interest rates to the sum of the logs of all nominal variables that appear on the right hand side of the reaction function if we force a particular measure of expected future inflation to proxy for all the nominal variables that actually appear independently in the reaction function we are bound to get distorted conclusions on the one hand because expected future inflation will be a noisy measure of the full set of nominal influences on policy we might get downward bias in our estimates from the usual errorsin variables effect on the other hand to the extent that expected future inflation like most expected future values shows less variation than current nominal variables we could find a mistaken scaling up of coefficients

the stability of short term interest rates pass through in the euro area during the financial market and sovereign debt crises we analyse the dynamics of the pass through of banks marginal cost to bank lending rates over the 2008 crisis and the euro area sovereign debt crisis in france germany greece italy portugal and spain we measure banks marginal cost by their rate on new deposits contrary to the literature that focuses on money market rates this allows us to account for banks risks we focus on the interest rate on new short term loans granted to non financial corporations in these countries our analysis is based on an error correction approach that we extend to handle the time varying long run relationship between banks lending rates and banks marginal cost as well as stochastic volatility our application is based on a harmonised monthly database from january 2003 to october 2014 we estimate the model within a bayesian framework using markov chain monte carlo methods mcmc we reject the view that the transmission mechanism is permanent over time the long run relationship moved with the sovereign debt crises to a new one with a slower pass through and higher bank lending rates its developments are heterogeneous from one country to the other impediments to the transmission of monetary rates depend on the heterogeneity in banks marginal costs and therefore its risks we also find that rates to small firms increase compared to large firms in a few countries using a var model we show that overall the effect of a shock on the rate of new deposits on the unexpected variances of new loans has been less important since 2010 these results confirm the slowdown in the transmission mechanism

identifying supply and demand elasticities of agricultural commodities implications for the us ethanol mandate we present a new framework to identify supply elasticities of storable commodities where past shocks are used as exogenous price shifters in the agricultural context past yield shocks change inventory levels and futures prices of agricultural commodities we use our estimated elasticities to evaluate the impact of the 2009 renewable fuel standard on commodity prices quantities and food consumers surplus for the four basic staples corn rice soybeans and wheat prices increase 20 per cent if one third of commodities used to produce ethanol are recycled as feedstock with a positively skewed 95 percent confidence interval that ranges from 14 to 35 per cent jel q11 q16 q42 q48

economic growth convergence and agricultural economics after nearly two centuries of lagging behind the industrial countries growth in many developing countries has surged since the early 1990s this outperformance has major implications for almost all areas of agricultural economics and if continued will likely do so into the future this article aims to identify the key ways in which the changes in rich and poor country growth rates matter for agricultural economists as a basis for formulating better research agendas a key impact arises through sharp increases in demand for agricultural resources as demand for livestock products increases this changing structure of food demand has important implications for nutrition studies and policies with the emergence of a double burden of malnutrition on the supply side growth in developing countries tends to increase domestic food supply which is also boosted by increases in research and development spending growth in developing countries both stimulates and benefits from increases in infrastructure investment evaluation of which requires new analytical tools negative impacts include the contribution of increased demand for livestock products to global greenhouse gas emissions in terms of trade policy growth in developing country is tending to lead to convergence of agricultural policies with the pattern of assistance seen in today s developed countries raising concerns about the future need to deal with collective action problems particularly those that increase the volatility of world prices