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on Financial Development and Growth |
| By: | David, DE LA CROIX (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Center for Operations Research and Econometrics (CORE)); Michel LUBRANO (GREQAM and CNRS) |
| Abstract: | The ELIE scheme of Kolm taxes labour capacities instead of labour income in order to circumvent the distortionary effect of taxation on labour supply. Still, Kolm does not study the impact of ELIE on human capital formation and investment. In this paper, we build an overlapping generations (OLG) model with heterogenous agents and endogenous growth driven by investment in human capital. We study the effect of ELIE on education investment and other aggregate economic variables. Calibrating the model to French data, we highlight a tradeoff between growth and redistribution. With a perfect credit market, ELIE is successful in reducing inequalities and poverty, but it is at the expense of lower investment in education and slower growth. In an economy with an imperfect credit market where individuals cannot borrow to educate, the tradeoff between growth and redistribution is not overturned but is less severe. However, it is possible to overturn completely that trade-off simply by changing the base of taxation for the young generation which is equivalent to subsidising education. |
| Keywords: | Education, Growth, Redistribution, Kolm |
| JEL: | O41 H20 I38 |
| Date: | 2009–06–09 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2009011&r=fdg |
| By: | Ratbek Dzhumashev; Emin Gahramanov |
| Abstract: | In this paper we develop a stochastic endogenous growth model augmented with income tax evasion. Our model avoids some existing discrepancies between empirical evidence and theoretical predictions of traditional tax evasion models. Further, we show that: i) productive government expenditures play an important role in affecting economy's tax evasion rate; ii) the average marginal income tax rate in Australia come close to the optimal; and iii) the phenomenon of tax evasion is not an excuse for a productive government to advocate an excessive income taxation. |
| Keywords: | Tax evasion; Economic growth; Public services |
| JEL: | H26 D91 O41 |
| Date: | 2009–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:dkn:econwp:eco_2009_05&r=fdg |
| By: | Gareth D. Myles |
| Abstract: | Economic growth is the basis of increased prosperity. This makes the attainment of growth a key objective for governments across the world. The rate of growth can be affected by policy choices through the effect that taxation has upon economic decisions and through productive public expenditures. This paper provides a self-contained introduction to the economic modelling of growth and reviews the theoretical evidence on the extent of the link between taxation and growth.<P>La croissance économique et le rôle de la fiscalité - Théorie<BR>La croissance économique est au fondement du progrès de la prospérité. Ceci fait de la croissance un objectif majeur pour les gouvernements du monde entier. Le taux de croissance peut être influencé par des choix de politique économique relatifs à la fiscalité, laquelle a un effet sur les décisions économiques des agents et est liée aux dépenses publiques productives. Cette étude fournit une introduction autonome à la modélisation économique de la croissance et résume les résultats empiriques traitant du lien entre la fiscalité et la croissance. |
| Keywords: | taxation, fiscalité, croissance économique, croissance, public policy, politique publique, economic growth |
| JEL: | H2 H3 O4 |
| Date: | 2009–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:713-en&r=fdg |
| By: | Gareth D. Myles |
| Abstract: | Economic growth is the basis of increased prosperity. This makes the attainment of growth a key objective for governments across the world. The rate of growth can be affected by policy choices through the effect that taxation has upon economic decisions and through productive public expenditures. This paper surveys research that has undertaken empirical analysis of aggregate data. The focus of the survey is the identification of the factors that determine the rate of growth.<P>La croissance économique et le rôle de la fiscalité – Données agrégées<BR>La croissance économique est au fondement du progrès de la prospérité. Ceci fait de la croissance un objectif majeur pour les gouvernements du monde entier. Le taux de croissance peut être influencé par des choix de politique économique relatifs à la fiscalité, laquelle a un effet sur les décisions économiques des agents et est liée aux dépenses publiques productives. Cette étude résume les recherches qui ont porté sur l’analyse empirique des données agrégées. Le but de cette étude est d’identifier les facteurs qui ont une influence sur le taux de croissance. |
| Keywords: | taxation, fiscalité, economic growth, croissance économique, public policy, politique publique, aggregate data, données agrégées |
| JEL: | C01 H H2 O4 |
| Date: | 2009–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:714-en&r=fdg |
| By: | Fabio Eboli (Fondazione Eni Enrico Mattei); Ramiro Parrado (Fondazione Eni Enrico Mattei and Ca’ Foscari University); Roberto Roson (Ca’ Foscari University, Venice) |
| Abstract: | Human-generated greenhouse gases depend on the level of economic activity. Therefore, most climate change studies are based on models and scenarios of economic growth. Economic growth itself, however, is likely to be affected by climate change impacts. These impacts affect the economy in multiple and complex ways: changes in productivity, resource endowments, production and consumption patterns. We use a new dynamic, multi-regional Computable General Equilibrium (CGE) model of the world economy to answer the following questions: Will climate change impacts significantly affect growth and wealth distribution in the world? Should forecasts of human-induced greenhouse gases emissions be revised, once climate change impacts are taken into account? We found that, even though economic growth and emission paths do not change significantly at the global level, relevant differences exist at the regional and sectoral level. In particular, developing countries appear to suffer the most from climate change impacts. |
| Keywords: | Computable General Equilibrium Models, Climate Change, Economic Growth |
| JEL: | C68 E27 O12 Q54 Q56 |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.43&r=fdg |
| By: | Gareth D. Myles |
| Abstract: | Economic growth is the basis of increased prosperity. This makes the attainment of growth a key objective for governments across the world. The rate of growth can be affected by policy choices through the effect that taxation has upon economic decisions and through productive public expenditures. This paper surveys the empirical analysis of disaggregate data on growth. The aim is to identify how economic policy can affect the choices that have been identified as influences upon the rate of growth.<P>La croissance économique et le rôle de la fiscalité - Données désagrégées<BR>La croissance économique est au fondement du progrès de la prospérité. Ceci fait de la croissance un objectif majeur pour les gouvernements du monde entier. Le taux de croissance peut être influencé par des choix de politique économique relatifs à la fiscalité, laquelle a un effet sur les décisions économiques des agents et est liée aux dépenses publiques productives. Cette étude résume les recherches qui ont porté sur l’analyse empirique des données désagrégées. Le but de cette étude est d’identifier comment la politique économique peut influencer les choix qui ont eux-mêmes un impact sur le taux de croissance. |
| Keywords: | taxation, fiscalité, economic growth, croissance économique, public policy, politique publique, disaggregate data, données désagrégées |
| JEL: | C01 H2 H3 O4 |
| Date: | 2009–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:715-en&r=fdg |
| By: | Gunther Capelle-Blancard; Yamina Tadjeddine |
| Abstract: | The location of financial activities is traditionally characterized by a great deal of inertia. However, the boom in new information and communication technologies, the globalization of economies and the 2007-08 financial crisis have considerably modified the geography of finance. Financial globalization has, first of all, had a heavy impact on the level of spatial concentration / dispersion of activities. The dynamics have not acted in a uniform way – schematically speaking three levels can be distinguished. On the urban scale, financial activities have been spread out (suburbanization), while on the regional scale or the national scale, due to financial globalization, financial activities have been more tightly grouped. Lastly, on the international scale, a movement of dispersion has mainly been observed, along with a specialization of financial centers. The 2007-08 financial crisis might well accentuate this last effect and cause an upheaval in world hierarchy. Actually, the financial centers that are most elastic to the economic situation – London, New York and tax havens – are massively losing jobs, while the stock markets in Shanghai, Hong Kong and Bombay are now upstaging them as major players. |
| Keywords: | Financial Geography, International Financial Centers, Globalization, Informational Externalities |
| JEL: | E44 G2 R1 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2009-26&r=fdg |
| By: | Tatevik Sekhposyan; Barbara Rossi |
| Abstract: | We evaluate various economic models’ relative performance in forecasting future US output growth and inflation on a monthly basis. Our approach takes into account the possibility that the models’ relative performance can be varying over time. We show that the models’ relative performance has, in fact, changed dramatically over time, both for revised and realtime data, and investigate possible factors that might explain such changes. In addition, this paper establishes two empirical stylized facts. Namely, most predictors for output growth lost their predictive ability in the mid-1970s, and became essentially useless in the last two decades. When forecasting inflation, instead, fewer predictors are significant, and their predictive ability significantly worsened around the time of the Great Moderation. |
| Keywords: | Output Growth Forecasts, Inflation Forecasts, Model Selection, Structural Change, Forecast Evaluation, Real-time data. Evaluation |
| JEL: | C22 C52 C53 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:duk:dukeec:08-6&r=fdg |
| By: | Gebhard Kirchgässner; Friedrich Schneider |
| Abstract: | In this paper we deal with two questions, (i) what are the origins of the current financial crisis, and (ii) what did economists contribute, or why did economists fail to provide a convincing answer for the origins of the crisis, and possible solutions to overcome it? Apparently, the economics profession was unaware of the looming worldwide financial and economic crisis, and significantly underestimated its global dimensions and consequences. A first and prelimi-nary analysis is undertaken to explore reasons for these failures. We conclude by pointing to some consequences for economics as well as for economic policy. |
| Keywords: | Financial Crisis, Crisis Management, Failure of Economics, Failure of Economic Researchers, Origin of the Crisis. |
| JEL: | A11 B40 D72 D73 D8 K2 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:usg:dp2009:2009-14&r=fdg |
| By: | Kuboniwa, Masaaki |
| Abstract: | This paper addresses the issues of measurement of Russia's dependence on oil and gas as well its attempts for diversification with shift toward a technology-centered economy. It further develops the Russia's input-output system to provide a better understanding of these issues. First, it clarifies the extent of the GDP of the mining (oil and gas) sector in Russia by modifying the original supply and use tables. Second, it provides an analysis of the diversification attempts through development of light automobiles by extending the supply and use tables. Third, it presents an attempt of multi-sectoral growth accounting based on our estimations of capital stock, focusing on the capital and TFP (Total Factor Productivity) contributions to growth. |
| Keywords: | Russia, oil dependence, diversification, input-output, growth accounting |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:18&r=fdg |
| By: | Theresa Grafeneder-Weissteiner; Klaus Prettner |
| Abstract: | This article investigates the effects of introducing demography into the New Economic Geography. We generalize the constructed capital approach, which relies on infinite individual planning horizons, by introducing mortality. The resulting overlapping generation framework with heterogeneous individuals allows us to study the effects of ageing on agglomeration processes by analytically identifying the level of trade costs that triggers catastrophic agglomeration. Interestingly, this threshold value is rather sensitive to changes in mortality. In particular, the introduction of a positive mortality rate makes the symmetric equilibrium more stable and therefore counteracts agglomeration tendencies. In sharp contrast to other New Economic Geography approaches, this implies that deeper integration is not necessarily associated with higher interregional inequality. |
| Keywords: | Agglomeration, New Economic Geography, Trade and Growth, Constructed Capital Model, Population Ageing. |
| JEL: | C61 F12 F15 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:vid:wpaper:0901&r=fdg |