innovation behaviour and regional indigenous potential meyer krahmer f 1985 innovation behaviour and regional indigenous potential reg studies 19 523 534 this paper has been written in order to present empirical results about some hypotheses not yet very well clarified in innovation oriented regional research the first part relates to one of the assumptions underlying innovation oriented regional policy which is that innovating and non innovating firms have different characteristics with respect to employment product lines and markets in particular the contribution to regional growth made by innovating firms is said to be larger in the second part of the paper the results of a study are presented in which it was attempted to find out empirically the extent of regional differences in indigenous innovation potential in the federal republic of germany reference is made to the innovating firms their performance and behaviour and bottlenecks in innovation as in other recent studies it is confirmed that there exists also in rural regions a sizeab

innovation and regional growth in small high technology firms evidence from britain and the usa oakey r p 1984 innovation and regional growth in small high technology firms evidence from britain and the usa reg studies 18 237 251 this paper examines the varying impact of regional resources on innovation in small high technology firms evidence is drawn from diverse local economies ranging from the development region of scotland through the south east of england to the bay area of california measurement focuses on the key inputs to innovation of research and development and investment capital surprisingly the findings indicate encouraging small firm innovation and growth in scotland an anticipated higher incidence of venture capital funding in the usa is confirmed and quantified with concluding comments on the policy implications resulting from this discrepancy

labor s share the firm s market power and total factor productivity we investigate the relationship between labor s share firm s market power and the elasticity of output with respect to labor input using an approach based on an unobserved components model the approach yields time varying estimates of market power and the elasticity evidence on the market power of firms which we find to be rising since 2000 gives a deeper understanding of movements in labor s share and the labor wedge the generated values of the elasticity yield revised estimates of total factor productivity growth which is informative about the extent of the downward bias inherent in traditional estimates which use labor s share as a proxy for the elasticity jel o47 c32 e25

the role of investment specific technological change in the business cycle this is a quantitative investigation of the importance of technological change speci c to new investment goods for postwar us aggregate uctuations a growth model that incorporates this form of technological change is calibrated to us data and simulated using the relative price of new equipment to identify the process driving investmentspeci c technology shocks the analysis suggests that this form of technological change is the source of about 30 of output uctuations 2000 elsevier science b v all rights reserved

taxes redistribution and the minimum wage a theoretical analysis this paper considers a simple general equilibrium model that contains two types of workers with differing levels of ability and a social welfare maximizing government the paper shows that social welfare can sometimes be increased by supplementing an optimal linear income tax with a minimum wage but that social welfare can never be increased by supplementing an optimal nonlinear income tax with a minimum wage

the quantitative importance of news shocks in estimated dsge models we estimate a dynamic stochastic general equilibrium dsge model with several frictions and both unanticipated and news shocks using quarterly u s data from 1954 to 2004 and bayesian methods we find that unanticipated shocks dominate news shocks in accounting for the unconditional variance of output consumption and investment growth interest rate and the relative price of investment the unanticipated shock to the marginal efficiency of investment is the dominant shock accounting for over 45 of the variance in output growth news shocks account for less than 15 of the variance in output growth within the set of news shocks nontechnology sources of news dominate technology news with wage markup news shocks accounting for about 60 of the variance share of both hours and inflation we find that in the estimated dsge model i the presence of endogenous countercyclical price and wage markups due to nominal frictions substantially diminishes the importance of news shocks relative to a model without these frictions and ii while there is little change in the estimated contributions of technology news when we restrict wealth effects on labor supply the contributions of nontechnology news shocks are relatively more sensitive

on the impacts of anticipated carbon policies a dynamic stochastic general equilibrium model approach abstract this paper examines the environmental and welfare impacts of pre announced carbon policies using an environmental dynamic stochastic general equilibrium e dsge model we find that pre announcing a rise in the carbon tax rate could reduce co2 emissions but would decrease output and investment during the interim period between the announcement and implementation dates pre announcing an increase in the carbon tax rate from 1 to 5 1 and 3 years in advance could reduce the quarterly aggregate consumption by 0 081 and 0 114 respectively compared to carbon taxation pre announcing a tightening carbon intensity target could reduce co2 emissions even more while pre announcing a tightening carbon capacity target under a cap and trade regime has no such co2 reduction effect in a welfare analysis we show that an unanticipated rise in the carbon tax rate is more preferable to the 1 year 2 year and 3 year ahead announcements the intensity regime produces a greater welfare than the cap and trade regime which is in turn better than the carbon taxation regime

do central banks respond to exchange rate movements a structural investigation abstract we estimate a small scale structural general equilibrium model of a small open economy using bayesian methods our main focus is the conduct of monetary policy in australia canada new zealand and the uk we consider generic taylor type rules where the monetary authority reacts in response to output inflation and exchange rate movements we perform posterior odds tests to investigate the hypothesis whether central banks do target exchange rates the main result of this paper is that the central banks of australia and new zealand do not whereas the bank of canada and the bank of england do include the nominal exchange rate in its policy rule this result is robust for various specification of the policy rule we also find that terms of trade movements do not contribute significantly to domestic business cycles

forming priors for dsge models and how it affects the assessment of nominal rigidities abstract we discuss prior elicitation for the parameters of dynamic stochastic general equilibrium dsge models and provide a method for constructing prior distributions for a subset of these parameters from beliefs about steady state relationships and second moments of the endogenous variables the empirical application documents how the specification of the prior distribution affects our assessment of the relative importance of price and wage rigidities in a new keynesian dsge model

marginal tax rates and income new time series evidence this paper estimates the dynamic effects of marginal tax rate changes on income reported on tax returns in the united states over the 1950 2010 period after isolating exogenous variation in average marginal tax rates in structural vector autoregressions using a narrative identification approach i find large positive effects of tax cuts in the top 1 of the income distribution in contrast to earlier findings based on tax return data i also find large effects in other income percentile brackets a hypothetical tax reform cutting marginal rates only for the top 1 leads to sizeable increases in top 1 incomes and has a positive effect on real gdp there are also spillover effects to incomes outside of the top 1 but top marginal rate cuts lead to greater inequality in pre tax incomes

nominal price rigidity money supply endogeneity and business cycles abstract this paper investigates the ability of nominal price rigidity to explain the co movement of inflation with the cyclical component of output observed in the post war u s data a dynamic general equilibrium model is constructed with the introduction of monopolistic competition and nominal price rigidity in a standard real business cycle model allowing for an endogenous money supply rule it is then demonstrated that sticky price models can explain the observed associations between movements in inflation and output much better than flexible price models this result depends little on whether money supply is assumed to be endogenous or not

internal and external habits and news driven business cycles in many applications of habit persistence to macroeconomics it is of little significance whether habits are internal or external in this paper it is shown that the distinction between internal and external habits is important in a situation wherein a shock is news about the future an internal habit can be a source of news driven business cycles positive comovement in consumption labor investment and output from the news about the future whereas an external habit cannot

on the role of the production and consumption assumptions for optimum taxation abstract the sensitivity of optimum tax rates to a variety of factors has sustained many different lines of enquiry this paper attempts to demonstrate by computational procedures the role of the production and consumption leisure assumptions in the light of recent research in particular the work of stern will be extended to provide an assessment of the allen analysis it will be shown that optimum negative marginal tax rates are no longer a curiousity and that our production and consumption leisure assumptions are of considerable importance for variable wage tax models

government r d expenditure and space empirical evidence from five industrialized countries abstract in all industrialized countries several ministries pursue technology policies but only in germany and france are there special ministries for research and technology carrying out explicit technology policy in the usa great britain and france in particular public spending on defense is most relevant technologically in this study this kind of unintended technology policy will be referred to as implicit only a minor part of national r d activity is initiated with regional goals in mind the major part by far aims for national competitiveness the central hypothesis of this paper is that government r d spending generates unintended spatial effects which are far more consequential than the intended ones this study attempts to explain the phenomenon the technology policies of the five major industrialized countries usa germany japan france and great britain will be analyzed and the general tendency of governments to spatially cluster their r d assistance will be discussed the empirical section of this paper focuses on the relationship between government r d spending and employment in the high technology sector

defence spending in the u k regions short j 1981 defence spending in the u k regions reg studies 15 101 110 this paper traces the incidence of defence expenditure in the regions of the united kingdom over the years 1974 1975 1977 1978 inclusive it examines contracts with industry and the expenditure resulting from the deployment of ministry of defence manpower this paper shows that significant differences exist between the levels of defence expenditure in the regions reflecting these two factors it concludes that the scope for using defence expenditure to influence regional income and employment is limited

government and the decentralization of r d abstract the purpose of this article is to show how costs and benefits of geographical decentralization of r d can be identified and compared the benefits for the region that receives r d activities are studied in section 2 they stem from the short run multiplier effect the amelioration of human capital and the possible modernization of the local industrial structure on the cost side examined in section 3 the observable impacts of the decentralization of r d concern the loss of returns to scale and urban economies of the production of the r d output it is shown in section 4 that the flows of costs and benefits must be discounted by the social cost of capital the main conclusion of this article is that the decentralization of r d in a large sparsely populated country entails social costs and this would weaken its competitive position in world commerce on the other hand the issue of decentralization is more crucial for small countries in terms of population and economic size than for large ones like the u s where critical masses of research efforts can be simultaneously attained in many fields and in many places

why firm size matters investigating the drivers of innovation and economic performance in new zealand using the business operations survey abstractthe performance of the new zealand nz economy is something of an enigma although ranked one of 144 countries for four important growth fundamentals nz is middle of the pack when it comes to economic growth productivity and process innovation using four iterations 2005 2007 2009 and 2011 of the business operations survey this research seeks to shed some new light on this conundrum by using a multivariate probit regression mvprobit approach applied to pooled samples in excess of 22 000 unit record observations of nz firms the results suggest that factors including firm size high perceived quality investment research and development rd while many external issues such as those related to geography market structure business environment have little influence at the firm level innovations in nz are highly dependent on the fi

news shocks and the slope of the term structure of interest rates abstract we adopt a statistical approach to identify the shocks that explain most of the fluctuations of the slope of the term structure of interest rates we find that one shock can explain the majority of unpredictable movements in the slope impulse response functions lead us to interpret this shock as news about future total factor productivity tfp by showing that slope shocks are essentially tfp news shocks we provide a new explanation for the relationship between the slope and macroeconomic fundamentals our results also provide a new empirical benchmark for structural models at the intersection of macroeconomics and finance jel e23 e43 e52 g12 g14

the reaction of household consumption to predictable changes in social security taxes the key implication of rational expectations and the basic life cycle permanent income hypothesis that predictable changes in income have no effect on the growth rate of consumption expenditures is examined this implication is important for understanding the effectiveness and optimal timing of fiscal policy the causes and propagation of business cycles and the effects of income fluctuations on the growth rate of the economy using household level consumption data from the consumer expenditure survey whether expenditures on nondurable goods increase contemporaneously with predictable changes in social security tax withholding is tested it is found that households do change their consumption expenditures in response to the predictable fluctuations in income induced by the social security tax system

optimal linear income taxation with general equilibrium effects on wages abstract the paper argues that the endogeneity of wages may make a considerable difference to optimal linear tax rates in this case there is not only the usual direct redistribution via the fiscal system but also the general equilibrium redistribution due to the change in wages depending on the elasticity of substitution of the production function and the labour supply elasticities these may be reinforcing or opposing it is shown that the general equilibrium effect may plausibly outweigh the direct effect so that net redistribution to the lower paid involves a wage subsidy financed by a lump sum tax

federal r and d spending in the united states of america some impacts on metropolitan economies malecki e j 1982 federal r d spending in the unitd states of america some impacts on metropolitan economies reg studies 16 19 35 government r and d spending in the united states of america is highly concentrated in a small number of metropolitan areas the effects of this spending are conceptualized in the context of technological change and in terms of local income effects agglomeration and spin off processes and inter urban subcontracting linkages description of the location pattern of federal r and d spending reveals a highly agglomerated pattern in a few specialized urban regions inter urban linkages through subcontracting for r and d tend to link fewer urban areas than do non r and d linkages reinforcing the concentrated pattern income change in metropolitan regions appears to be negatively influenced by federal r and d suggesting that positive local effects are more likely derived from the more complex processes of agglomeration and spin off

effective tax rates in macroeconomics cross country estimates of tax rates on factor incomes and consumption abstract this paper proposes a method for computing tax rates using national accounts and revenue statistics using this method we construct time series of tax rates for large industrial countries the method identifies the revenue raised by different taxes at the general government level and defines aggregate measures of the corresponding tax bases this method yields estimates of effective tax rates on factor incomes and consumption consistent with the tax distortions faced by a representative agent in a general equilibrium framework these tax rates compare favorably with existing estimates of marginal tax rates and highlight important international differences in tax policy

macroeconomic effects from government purchases and taxes for u s annual data that include world war ii the estimated multiplier for temporary defense spending is 0 4 0 5 contemporaneously and 0 6 0 7 over 2 years if the change in defense spending is permanent gauged by ramey s defense news variable the multipliers are higher by 0 1 0 2 since all estimated multipliers are significantly less than 1 greater spending crowds out other components of gdp particularly investment the lack of good instruments prevents estimation of reliable multipliers for nondefense purchases multipliers in the literature of two or more likely reflect reverse causation from gdp to nondefense purchases increases in average marginal income tax rates measured by a newly constructed time series have significantly negative effects on gdp when interpreted as a tax multiplier the magnitude is around 1 1 the combination of the estimated spending and tax multipliers implies that the balanced budget multiplier for defense spending is negative we have some evidence that tax changes affect gdp mainly through substitution effects rather than wealth effects

the general equilibrium effects of fiscal policy estimates for the euro area abstract this paper describes a dynamic stochastic general equilibrium model featuring a fraction of non ricardian agents in order to estimate the effects of fiscal policy in the euro area the model takes into account distortionary taxation on labor and capital income and on consumption while expenditures are broken down into purchases of goods and services compensation of public employees and transfers to households a newly computed quarterly data set of fiscal variables is used our results point to the prevalence of mild keynesian effects of public expenditures in particular although innovations in fiscal policy variables tend to be rather persistent government purchases of goods and services and compensations for public employees have small and short lived expansionary effects on private consumption while innovations in transfers to households show a slightly more sizeable and lasting effect the effects are more significant on the revenue side decreases in labor income and consumption tax rates have sizeable effects on consumption and output while a reduction in capital income tax favors investment and output in the medium run finally our estimates suggest that fiscal policy variables contribute little to the cyclical variability of the main macro variables

can news be a major source of aggregate fluctuations a bayesian dsge approach we examine whether the news shocks as explored in beaudry and portier 2004 can be a major source of aggregate fluctuations for this purpose we extend a dynamic stochastic general equilibrium model a la christiano eichenbaum and evans 2005 by allowing news shocks on the total factor productivity and estimate the model using bayesian methods estimation results on the japanese and u s economies show that 1 the news shocks play an important role in business cycles 2 a news shock with a longer forecast horizon has larger effects on nominal variables and 3 the overall effect of the total factor productivity on hours worked becomes ambiguous in the presence of news shocks

quantifying tax effects under policy foresight abstract studies of tax effects make the conventional information assumption that changes in period t taxes become known at t legislative lags however imply that news arrives before tax changes take place under policy foreknowledge the conventional information structure is therefore misspecified simulations of a standard neoclassical growth model suggest that foresight of only one quarter can distort substantially the estimates of tax effects obtained under the no foresight assumption also it is crucial to model capital and labor taxes separately anticipated changes in these two tax policies have opposite effects on consumption investment labor and output before policy realization

are consumers forward looking evidence from fiscal experiments how changes in current and future income affect consumer spending is a perennial question in macroeconomics and public finance theoretical constructs such as the permanent income hypothesis are of limited assistance in resolving this issue because they neglect borrowing constraints and other market imperfections that can significantly affect the marginal propensity to spend out of current income recent empirical work has also proven inconclusive since whether consumption responds to income fluctuations by more or less than the permanent income hypothesis predicts turns critically upon whether disposable income follows a random walk or is stationary around a longrun trend see john campbell and angus deaton 1987 this controversy is unlikely to be resolved conclusively because it is notoriously difficult to distinguish a stationary but highly persistent time series from one that is nonstationary these difficulties suggest the importance of searching for natural experiments income shocks with predictable and well understood effects on future income to test models of consumer behavior changes in federal tax and transfer policy during the last two decades provide several episodes of this type analyzing the effects of these tax changes is also central to understanding the role of fiscal policy in affecting national saving this paper examines two aspects of consumer response to tax changes section i argues that consumption responds to temporary income tax shocks by more than the permanent income hypothesis would suggest results from the 1975 tax rebate in particular suggest that a 1 increase in transitory income raises spending by about 20 cents section ii examines consumption responses to tax announcements although the results are not conclusive they suggest that some consumers do not adjust consumption in anticipation of tax changes the final section sketches some implications for analyzing fiscal policy

fiscal foresight and information flows news or foresight about future economic fundamentals can create rational expectations equilibria with non fundamental representations that pose substantial challenges to econometric efforts to recover the structural shocks to which economic agents react using tax policies as a leading example of foresight simple theory makes transparent the economic behavior and information structures that generate non fundamental equilibria econometric analyses that fail to model foresight will obtain biased estimates of output multipliers for taxes biases are quantitatively important when two canonical theoretical models are taken as data generating processes both the nature of equilibria and the inferences about the effects of anticipated tax changes hinge critically on hypothesized information flows different methods for extracting or hypothesizing the information flows are discussed and shown to be alternative techniques for resolving a non uniqueness problem endemic to moving average representations

the u s national innovation system origins and prospects for change in recent years the concept of national innovation systems has attained considerable currency and interest although a precise definition of a national innovation system is difficult analyses of the japanese and u s national innovation systems have implicitly defined them as the array of public and private institutions and organizations within an economy that fund and perform rd nelson 1993 interest in national innovation systems stems in part from a growing acknowledgment of the contributions to national economic welfare of superior performance in the commercialization and adoption of new technologies this awareness in turn has been heightened by the innovative and economic strength of postwar japan

fiscal news and macroeconomic volatility abstract this paper analyzes the contribution of anticipated capital and labor tax shocks to business cycle volatility in an estimated new keynesian business cycle model while fiscal policy accounts for about 15 of output variance at business cycle frequencies this mostly derives from anticipated government spending shocks tax shocks both anticipated and unanticipated contribute little to the fluctuations of real variables however anticipated capital tax shocks do explain a sizable part of inflation fluctuations accounting for up to 12 of its variance in line with earlier studies news shocks in total account for about 50 of output variance further decomposing this news effect we find permanent total factor productivity news shocks to be most important when looking at the federal level instead of total government the importance of anticipated tax and spending shocks significantly increases suggesting that fiscal policy at the subnational level typically counteracts the effects of federal fiscal policy shocks

the macroeconomic effects of distortionary taxation abstract prescott 1986 estimates that technology shocks account for 75 of the fluctuations in the postwar u s economy this paper reestimates the contribution of technological change for a standard business cycle model that includes a public sector and fiscal disturbances i find that a significant fraction of the variance of aggregate consumption investment output capital stock and hours of work can be explained by disturbances in labor and capital tax rates and government consumption i also use the model to quantify the welfare costs of capital and labor taxation for both the time series and welfare calculations maximum likelihood estimates of taste technology and policy parameters are used

distortionary taxation and labor supply this paper examines empirically the effects of distortionary taxation on labor supply using a general equilibrium framework the long term relations predicted by the model are derived and tested using data from canada united states germany and japan in all these countries labor tax changes are found to be persistent and to have played an important role in the observed downward trend in hours worked

the optimal public employment policy abstract this paper studies optimal public employment in a model with two types of labor unskilled and skilled and a single consumption good a linear income tax is used to redistribute income it is shown that if the income tax and public employment levels are optimal then there is less unskilled labor and more skilled labor in public production than is necessary to minimize costs at the prevailing gross wage rates the robustness of this result is investigated by examining a second model

investment shocks and business cycles abstract the origins of business cycles are still controversial among macroeconomists this paper contributes to this debate by studying the driving forces of fluctuations in an estimated new neoclassical synthesis model of the u s economy in this model most of the variability of output and hours at business cycle frequencies is due to shocks to the marginal efficiency of investment imperfect competition and to a lesser extent technological frictions are the key to their transmission although labor supply shocks explain a large fraction of the fluctuations in hours at very low frequencies they are irrelevant over the business cycle this finding is important because the microfoundations of these disturbances are widely regarded as unappealing

housing market dynamics in a small open economy do external and news shocks matter we study the sources of fluctuations in the housing market of a small open economy we use an estimated dynamic stochastic general equilibrium dsge model and data from seven small open economies to assess the quantitative effects of both contemporaneous and news shocks to domestic and external fundamentals on housing market dynamics external shocks and news shocks have significant effects cyclical fluctuations in housing prices and housing investment are mainly driven by contemporaneous shocks related to foreign housing preferences and terms of trade and by news shocks related to domestic consumption goods technology housing preferences and terms of trade the spillover effects of external shocks on housing prices are notably larger than those of domestic shocks

income taxation endogenous factor prices and production efficiency in an analysis of a two type income tax model with endogenous wages this paper shows that production efficiency is violated in the optimum with i non linear and ii linear income taxation if and only if a distortionary tax schedule is implemented these findings complement earlier results of the literature in passing it is also shown that optima with non linear redistributive income taxation cannot be identified with the redistributive regime if the assumption of endogenous wages is taken seriously

route 128 the development of a regional high technology economy abstract a corner of massachusetts not far from boston s route 128 has become a world center of high technology hundreds of enterprises mainly in electronics based industries employ over 250 000 people 75 000 of whom were added between 1975 and 1980 enterprises founded after world war ii have spearheaded growth in the state with a rapid rate of new firm formation continuing through the 1970s this paper examines the state s high tech growth to determine what caused it to happen where it did and assess the special role of new enterprises in promoting it the development is found to have been largely indigenous and spontaneous rather than the result of a concerted effort to attract industry massachusetts distinguished universities and their research laboratories an inherited technological infrastructure the importance of agglomeration externalities and the good fortune of having a home grown firm become the world s leading manufacturer of minicomputers were major contributors to the state s success but the enormous opportunities for new enterprises which the electronics revolution generated and the tendency for such firms to start up mainly as spin offs from other high tech firms or from university laboratories and to remain close to their sources fueled the tendency towards spatial concentration

news driven business cycles insights and challenges there is a widespread belief that changes in expectations may be an important independent driver of economic fluctuations the news view of business cycles offers a formalization of this perspective in this paper we discuss mechanisms by which changes in agents information due to the arrival of news can cause business cycle fluctuations driven by expectational change and we review the empirical evidence aimed at evaluating their relevance in particular we highlight how the literature on news and business cycles offers a coherent way of thinking about aggregate fluctuations while at the same time we emphasize the many challenges that must be addressed before a proper assessment of the role of news in business cycles can be established jel d83 d84 e13 e32 o33

an analytical characterization of noisy fiscal policy this paper provides an analytical characterization of the effects of noisy news shocks on fiscal policy we consider a small scale dynamic stochastic general equilibrium dsge model with capital accumulation and endogenous labor supply and show that noise dampens the propagation of anticipated fiscal policy over the business cycle thus reducing the fiscal multiplier

an exploration into pigou s theory of cycles abstract this paper explores a theory of business cycles in which recessions and booms arise due to difficulties encountered by agents in properly forecasting the economy s future needs in terms of capital the idea has a long history in the macroeconomic literature as reflected by the work of pigou industrial fluctuation macmillan london 1926 the contribution of this paper is twofold first we illustrate the type of general equilibrium structure that can give rise to such phenomena second we examine the extent to which such a model can explain the observed pattern of u s recessions frequency depth without relying on technological regress we argue that such a model offer a framework for understanding elements of both the recent u s recession and of the asia downturns of the late 1990s

what are the effects of fiscal policy shocks we propose and apply a new approach for analyzing the effects of fiscal policy using vector autoregressions specifically we use sign restrictions to identify a government revenue shock as well as a government spending shock while controlling for a generic business cycle shock and a monetary policy shock we explicitly allow for the possibility of announcement effects i e that a current fiscal policy shock changes fiscal policy variables in the future but not at present we construct the impulse responses to three linear combinations of these fiscal shocks corresponding to the three scenarios of deficit spending deficit financed tax cuts and a balanced budget spending expansion we apply the method to us quarterly data from 1955 to 2000 we find that deficit financed tax cuts work best among these three scenarios to improve gdp with a maximal present value multiplier of five dollars of total additional gdp per each dollar of the total cut in government revenue 5 years after the shock copyright 2009 john wiley sons ltd

uncertainty and fiscal cliffs motivated by the us fiscal cliin 2012 this paper considers the short and longer term impact of uncertainty generated by scal policy empirical evidence shows in creases in economic policy uncertainty lower investment and employment investment that is longer lived and subject to a longer planning horizon responds to policy uncer tainty with a lag while capital that depreciates more quickly and can be installed with few costs falls immediately a dsge model incorporating uncertainty over future tax regimes produces responses to scal uncertainty that match key features of the data the model features uncertainty over the average tax rate and rational expectations about the resolution of uncertainty with speci c outcomes and timing uncertainty injects noise into the economy and lowers the level of economic activity

news shocks and business cycles abstract this paper proposes and implements a novel structural var approach to the identification of news shocks about future technology the news shock is identified as the shock orthogonal to the innovation in current utilization adjusted tfp that best explains variation in future tfp a favorable news shock leads to an increase in consumption and decreases in output hours and investment on impact more suggestive of standard dsge models than of recent extensions designed to generate news driven business cycles though news shocks account for a significant fraction of output fluctuations at medium frequencies they contribute little to our understanding of recessions

has fiscal policy helped stabilize the postwar u s economy abstract in this paper i consider whether postwar fiscal policy has helped stabilize the u s economy i do this by adding to the stochastic growth model fiscal policy feedback rules estimated from postwar data these rules allow fiscal policies to respond to current and lagged output and labor hours i use the estimated policy rules to see if postwar fiscal policy reduces output volatility and or lengthens expansions and shortens recessions i find that fiscal policy in general provides little stability on either count i also find that the endogenous feedback links by themselves can provide some stabilization

introducing financial frictions and unemployment into a small open economy model the current nancial crisis has made it abundantly clear that business cycle modeling no longer can abstract from nancial factors it is also becoming increasingly clear that the stylized modeling of labor markets without explicit unemployment that is the current standard approach has its limitations some questions which the dominating extant business cycle models are mute on but that we would like to answer are how important are nancial and labor market frictions for the business cycle dynamics of a

tax reform and adjustment costs the impact on investment and market value this paper provides an effective tax rate measure that is valid in the presence of adjustment costs and anticipated tax changes and a measure of the impact of tax changes on market value that may be decomposed into the effects on discounted pure profits and normal returns to capital changes in the value of capital may in turn be decomposed further into changes in the marginal value of new capital and changes in the relative value of new and existing capital these new measures are used to evaluate tax changes similar to those introduced by the recent u s tax reform copyright 1989 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

fiscal policy in general equilibrium this paper studies four classic fiscal policy experiments within a quantitatively restricted neoclassical model the authors main findings are as follows 1 permanent changes in government purchases can lead to short run and long run output multipliers that exceed one 2 permanent changes in government purchases induce larger effects than temporary changes 3 the financing decision is quantitatively more important than the resource cost of changes in government purchases and 4 public investment has dramatic effects on private output and investment these findings stem from important dynamic interactions of capital and labor absent in earlier equilibrium analyses of fiscal policy copyright 1993 by american economic association

noisy fiscal policy abstract this paper investigates the macroeconomic effects of fiscal policy in a setting in which private agents receive noisy signals about future shocks to government expenditures we show how to empirically identify the relative weight of news and noise shocks to government spending and compute the level of noise for canada the uk and the us we then investigate the quantitative implications of imperfect fiscal policy information using a medium scale dsge model we find that when the government seeks to implement a persistent change in expected public spending the existence of noise as estimated using actual data implies a sizable difference in fiscal multipliers compared to the perfect fiscal foresight case

long run implications of investment specific technological change an attempt is made to disentangle its effects from the more traditional hicksneutral form of technological progress the balanced growth path for the model is characterized and calibrated to u s national income and product account nipa data the quantitative analysis suggests that investment specific technological change accounts for the major part of growth jel e13 030 041 047

science technology and regional economic development review and prospects abstract this paper reviews the literature on the location and regional effects of science and technology st these pools of mobile workers are most attracted to large urban areas in only some of these areas however does the spin off process result in the generation of new technology based firms the availability of local venture capital appears to be the principal influence on this variation government policy regarding science and technology has impacts on regions by contributing to the agglomeration of r d government policy also often fails to recognize that s t policy and industrial policy have regional effects that may be long term in nature and most detrimental to those regions whose economies are least competitive finally some priorities for future research on innovation in a regional setting are identified

capital taxation during the u s great depression previous studies of the u s great depression find that increased government spending and taxation contributed little to either the dramatic downturn or the slow recovery these studies include only one type of capital taxation a business profits tax the contribution is much greater when the analysis includes other types of capital taxes a general equilibrium model extended to include taxes on dividends property capital stock excess profits and undistributed profits predicts patterns of output investment and hours worked that are more like those in the 1930s than found in earlier studies the greatest effects come from the increased taxes on corporate dividends and undistributed profits jel codes e13 e32 h25 copyright 2012 oxford university press

impacts of government incentives towards industrial innovation an analysis of the federal programme funding r d personnel in the federal republic of germany abstract against a background of deteriorating national and international economic conditions increasing importance is being attached by political administrations to the innovative capacities of small and medium sized firms with respect to the employment situation and to international competitiveness consequently government support of research development and innovation in these companies has taken a marked upward turn since the late seventies both in the federal republic of germany and in other industrialized western countries the actual impacts of some of these programmes are at present under study by the fraunhofer institut fur systemtechnik und innovationsforschung isi this paper is an outline of the results of a study of the largest current programme funding r d and innovation in small and medium sized firms by offering grants towards the costs of r d personnel the impact analysis is being conducted in two rounds the first round of studies which is the subject of this report took place in 1980 1981 and was designed to examine the discernible short term effects and characteristics of the programme the second round is planned for 1983 1984 as a summary of the impacts of the programme over the first five years of its term of effect the subjects of investigation are the quantitative and qualitative changes in r d activities caused by the programme in the firms under study and the contribution the programme can make to strengthen innovative and competitive capabilities the conditions underlying the programme are reviewed critically especially in order to see whether the barriers to innovation and the weak spots assumed did in fact exist in the firms examined the administrative management free rider effects and factors restricting impacts are investigated along with such questions as whether firms located in peripheral regions were reached by the programme to the same extent as firms in conurbation areas furthermore the reasons for non participation of firms are analyzed the example of the federal programme funding r d personnel thus is used in this impact analysis in an attempt to provide empirical data on the significance the range and the limits of such a government instrument promoting r d and innovation in small and medium sized firms

measuring the average marginal tax rate from the individual income tax the economic effects of taxation depend on the configuration of marginal tax rates we consider here the appropriate measure of a marginal tax rate for the federal individual income tax which has a graduated rate structure and allows for numerous legal and illegal deductions from total income our conclusion is that the explicit marginal rate from the tax schedule is the right concept for many purposes hence we construct approximately weighted averages of these marginal tax rates for 1916 80 when weighted by adjusted gross income the arithmetic average of marginal tax rates is 5 in 1920 2 in 1930 6 in 1940 20 in 1950 23 in 1960 24 in 1970 and 30 in 1980 we also discuss the dispersion of marginal tax rates as well as the behavior of average tax rates and deductions from taxable income one noteworthy result concerns the fraction of adjusted gross income that accrues to families that face a marginal tax rate of at least 35 this fraction quadruples from 1964 to 1980 this abstract was borrowed from another version of this item

the regional distribution of public employment theory and evidence abstractthe regional distribution of public employment theory and evidence regional studies this article analyzes the optimal regional pattern of public employment in an information constrained second best redistribution policy it shows that regionally differentiated public employment can serve as an expenditure side tagging device bypassing or relaxing the equity efficiency trade off the optimal pattern exhibits higher levels of public employment in low productivity regions and is more pronounced the higher is the degree of regional inequality empirically using a panel of european regions from 1995 to 2007 the analysis finds evidence that public employment is systematically higher in low productivity regions the latter effect is stronger in countries with higher levels of regional inequality

the dynamic effects of neutral and investment specific technology shocks the neoclassical growth model is used to identify the short run effects of neutral technology shocks which affect the production of all goods homogeneously and investment specific shocks which affect only investment goods the real equipment price crucial for identifying the investment shocks experiences an abrupt increase in its average rate of decline in 1982 so the analysis is based on a split sample on the basis of the preferred specification the two technology shocks account for 73 percent of hours and 44 percent of output s business cycle variation before 1982 and 38 percent and 80 percent afterward the shocks also account for more than 40 percent of hours and 58 percent of output s forecast errors over a three to eight year horizon in both samples the majority of these effects are driven by the investment shocks