nep-cmp New Economics Papers
on Computational Economics
Issue of 2007‒12‒08
three papers chosen by
Stan Miles
Thompson Rivers University

  1. Impact of Infrastructure Spending in Mali: A CGE modeling approach By Antonio Estache; Jean-François Perrault; Luc Savard
  2. Liberalization of the Swiss Letter Market and the Viability of Universal Service Obligations By Jaag, Christian
  3. Does Italy need family income taxation? By Arnstein Aassve; Maria Grazia Pazienza; Chiara Rapallini

  1. By: Antonio Estache (World Bank and, the European Centre for Advanced Research in Economics and Statistics at the Free University of Brussels); Jean-François Perrault (GREDI, Faculte d'administration, Université de Sherbrooke); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: In this paper we construct a standard CGE model to explore the impact of scaling up infrastructure in Mali. As the debate on the importance of scaling up infrastructure to stimulate growth and provide a push to African economies, some analyst raise concern on financing these infrastructures after construction and that external funding of these can create major distortion and have a negative impact on the trade balance of these countries. This study aims to provide so insight into this debate. It draws from the infrastructure productivity literature to postulate positive productive externalities of new infrastructure and Fay and Yepes (2003) for operating cost associated with new infrastructure. We compare various infrastructure investment funded with different fiscal tools. These investments scenarios are compared to non productive investment that can be interpreted as a business as usual scenario. Our results show that foreign aid does produce Dutch disease effects but the negative impacts are strongly dependent on the type of investments performed. Moreover, growth effects contribute to attenuate the negative effects.
    Keywords: Investment externalities, foreign aid, exchange rate, fiscal reforms
    JEL: C68 E62 F35 H54
    Date: 2007
  2. By: Jaag, Christian
    Abstract: We discuss the ongoing liberalization process in the market for addressed letter mail in Switzerland. The core of the paper is an assessment of the liberalization's impact on the financial viability of various universal service obligations with and without access to the incumbent's downstream delivery network for customers and competitors. We propose a simple calibrated model of the Swiss letter market offering theoretical insights into the mechanics of market opening along with quantitative conclusions bearing direct policy relevance. The extent of the entrants' market coverage and the equilibrium in the resulting price competition are endogenously determined. Our simulations suggest caution in introducing full market opening. For the scenarios considered, the model shows that either the burden of the USO must be reduced (e.g. with respect to the frequency and the coverage of delivery and / or through price differentiation). Alternatively, other means of assuring financial stability of Swiss Post must be sought, be it through external funds or demand stimulation through new producs, possibly in the worksharing domain.
    Keywords: Liberalization; Mail; Universal Service Obligation
    JEL: H4 L52 H44
    Date: 2007–10–06
  3. By: Arnstein Aassve (Istituto Metodi Quantitavi Quantitativi, Università Bocconi); Maria Grazia Pazienza (Dipartimento Studi sullo Stato, Università degli Studi di Firenze); Chiara Rapallini (Dipartimento Studi sullo Stato, Università degli Studi di Firenze)
    Abstract: The possible implications of using the family as opposed to the individual as the unit of taxation are not clear. This applies both to work incentives and distributional outcomes. In this paper we evaluate the effects of a hypothetical reform for Italian income taxation with respect to labour supply. In particular, we analyze potential labour supply effects by considering a shift from the current system of individual taxation to a system of family taxation similar to the French family splitting approach. The analysis is based on an econometric model of labour supply that is embedded in a tax–benefit model. Using data from the Bank of Italy Survey of Household Income and Wealth, our simulation results show relatively small effects on the total labour supply but a decrease in female labour supply.
    Keywords: tax benefit system, fiscal reform, labour supply, microsimulation
    JEL: D31 H24 H31 J22 C15
    Date: 2007

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