nep-pbe New Economics Papers
on Public Economics
Issue of 2013‒06‒24
twenty-one papers chosen by
Keunjae Lee
Pusan National University

  1. Sales Tax Collections in Nonmetropolitan Communities By Brorsen, B. Wade; Lansford, Notie H.
  2. Decentralisation and Economic Growth - Part 2: The Impact on Economic Activity, Productivity and Investment By Hansjörg Blöchliger; Balázs Égert
  3. Optimal Capital Taxation in A Neoclassical Growth Model By Chia-Hui Lu; Been-Lon Chen
  4. Does globalization matter on fiscal decentralization of OECD? By Barbara ERMINI; Raffaella SANTOLINI
  5. Decentralisation and Economic Growth - Part 1: How Fiscal Federalism Affects Long-Term Development By Hansjörg Blöchliger
  6. Mobility, Taxation and Welfare By Sami Bibi; Jean-Yves Duclos; Abdelkrim Araar
  7. Decentralisation and Economic Growth - Part 3: Decentralisation, Infrastructure Investment and Educational Performance By Kaja Fredriksen
  8. Mobility of top incomes in Germany By Jenderny, Katharina
  9. Social Spending and Income Redistribution in Argentina during the 2000s: The Rising Role of Noncontributory Pensions By Nora Lustig; Carola Pessino
  10. Model Specification Uncertainty and Tax on Sugar-Sweetened Beverages: Bayesian Averaging of Classical Estimates Approach By Dharmasena, Senarath; Bryant, Henry L.
  11. The 90% Public Debt Threshold: The Rise and Fall of a Stylised Fact By Balázs Égert
  12. Fiscal multipliers in turbulent times: the case of spain By Pablo Hernández de Cos; Enrique Moral-Benito
  13. Does “Crowd Out” Offset The Stimulus Effect Of Government Deficits? A Large Scale Econometric Study By John J. Heim
  14. Propagation and Smoothing of Shocks in Alternative Social Security Systems By Alan Auerbach; Lorenz Kueng; Ronald Lee
  15. Challenges to Sustain Poland's Growth Model By Balázs Égert; Rafał Kierzenkowski
  16. Inequality in China : an overview By Knight, John
  17. VAT Rate Effect on Price Setting Behaviour in Latvia: Evidence from CPI Micro Data By Konstantins Benkovskis; Ludmila Fadejeva
  18. Is there a relationship between income inequality and credit cycles? By Tuomas Malinen
  19. Lessons from 15 Years of Experience with the Dutch Tax Allowance for Energy Investments for Firms By Arjan Ruijs; Herman R.J. Vollebergh
  20. Social spending, distribution, and equality of opportunities : opportunity incidence analysis By Cuesta, Jose
  21. State dependence in the finance-growth nexus: A functional coefficient approach By Herwartz, Helmut; Walle, Yabibal M.

  1. By: Brorsen, B. Wade; Lansford, Notie H.
    Abstract: Small communities sometimes increase their local sales tax rate in order to maintain or expand public services. The question addressed here is what is the net effect of changing sales tax rates on revenues from sales taxes? Using both semiparametric and nonparametric regression, we find retail sales to be mostly unaffected by sales tax rates as long as the rate is less than four percent. At rates higher than four percent, however, there is a severe reduction in sales, yet not enough that sales tax revenues would decrease with increased rates. For a penny increase in sales tax rates from four cents, a city can expect their revenues to go up 0.86 cents according to the semiparametric model and 0.74 cents according to the parametric model.
    Keywords: rural development, sales tax, semiparametric estimation, nonmetropolitan, Community/Rural/Urban Development, Public Economics, H2, R51,
    Date: 2013
  2. By: Hansjörg Blöchliger; Balázs Égert
    Abstract: This paper analyses the relationship between fiscal decentralisation and economic activity. Like other institutional arrangements, fiscal decentralisation affects firms, households and public entities, and the way they save, invest, spend or innovate. This in turn may have considerable consequences for the long-term growth potential of a country. Based on a set of growth regressions, the results suggest that the relationship between fiscal decentralisation and GDP per capita, productivity or human capital is positive and statistically significant, while the relationship with investment is insignificant. Doubling the sub-central tax or spending share (e.g. moving from a decentralisation ratio of 15 to 30%) is associated with an increase of GDP per capita by 3% on average. Revenue-based decentralisation indicators (e.g. decentralisation of tax revenue or tax autonomy) deliver results both statistically and economically (larger coefficients) more significant than spending-based indicators. The results vary little between federal and unitary countries in general. Intergovernmental transfers tend to be negatively associated with GDP per capita. Finally, the relationship between decentralisation and GDP per capita is non-linear, with results suggesting that returns to decentralisation are decreasing.<P>Décentralisation et croissance économique : Partie 2 : Impact sur l'activité économique, la productivité et l'investissement<BR>La présente note analyse la relation entre la décentralisation budgétaire et l’activité économique. À l’instar d’autres modalités institutionnelles, la décentralisation influe sur les entreprises, les ménages et les entités publiques, ainsi que sur la manière dont ils économisent, investissent, dépensent ou innovent. Cela peut à son tour avoir des conséquences considérables sur le potentiel de croissance à long terme d’un pays. S’appuyant sur une série de régressions de croissance, les résultats conduisent à penser que la relation entre la décentralisation budgétaire et le PIB par habitant, la productivité ou le capital humain est statistiquement significative, alors que la relation avec l’investissement ne l’est pas. La multiplication par deux de la part des impôts ou des dépenses relevant des administrations infranationales (le ratio de décentralisation passant ainsi de 15 à 30 %, par exemple) est associée à une hausse du PIB par habitant de 3 % en moyenne. Les indicateurs de décentralisation fondés sur les recettes (par exemple la décentralisation des recettes fiscales ou l’autonomie fiscale) offrent des résultats plus significatifs statistiquement et économiquement (coefficients plus élevés) que les indicateurs basés sur les dépenses. Les résultats ne varient guère entre les pays à régime fédéral et les autres pays d’une manière générale. Les transferts intergouvernementaux se corrèlent généralement de manière négative avec le PIB par habitant. Enfin, la relation entre la décentralisation et le PIB par habitant n’est pas linéaire, les résultats conduisant à penser que le rendement de la décentralisation est en recul.
    Keywords: economic growth, productivity, fiscal decentralisation, fiscal federalism, croissance économique, productivité, fédéralisme budgétaire, décentralisation budgétaire
    JEL: H70 H77 O43
    Date: 2013–06–03
  3. By: Chia-Hui Lu (Department of Economics, National Taipei University); Been-Lon Chen (Institute of Economics, Academia Sinica, Taipei, Taiwan)
    Abstract: This paper studies the optimal factor tax incidence in a neoclassical growth model with a given share of government expenditure in output. In the Ramsey planner’s optimization, the effect of next period’s capital on government expenditure equals the given share of the marginal product of capital. Capital accumulation reduces the discounted net marginal product of next period’s capital by way of increasing government expenditure. In order to internalize the distortion, it is optimal to tax capital income in the long run.
    Keywords: Optimal factor taxation, efficiency
    JEL: D83 E62 H21 J64
    Date: 2013–05
  4. By: Barbara ERMINI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali); Raffaella SANTOLINI (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)
    Abstract: In this paper we re-examine the effects of globalization on fiscal decentralization of OECD by using the overall KOF index of globalization and its main subcomponents - economic, political and social integration. Using different indicators of fiscal decentralization, we find a positive impact of the overall index of globalization on both revenue and expenditure decentralization side, although not robust across different panel data specifications. Focusing on the links between decentralization and different aspects of globalization, we find that both economic and social integration foster fiscal decentralization, whereas political integration checks growth of it.
    Keywords: Economic integration, Fiscal decentralization, Globalization, Panel data analysis, Political integration, Social integration
    JEL: F15 F5 H7 H87
    Date: 2013–06
  5. By: Hansjörg Blöchliger
    Abstract: Intergovernmental fiscal frameworks usually reflect fundamental societal choices and history and are not foremost geared towards achieving economic policy objectives. Yet, like most institutional arrangements, fiscal relations affect the behaviour of firms, households and governments and thereby economic activity. This paper presents empirical research on the potential effects of fiscal decentralisation on a set of outcomes such as GDP, productivity, public investment and school performance. The results can be summarised as follows: decentralisation, as measured by revenue or spending shares, is positively associated with GDP per capita levels. The impact seems to be stronger for revenue decentralisation than for spending decentralisation. Decentralisation is strongly and positively associated with educational outcomes as measured by international student assessments (PISA). While educational functions can be delegated either to sub-central governments (SCG) or to schools, the results suggest that both strategies appear to be equally beneficial for educational performance. Finally, investment in physical and – especially – human capital as a share of general government spending is significantly higher in more decentralised countries.<P>Décentralisation et croissance économique : Partie 1 : Comment le fédéralisme budgétaire affecte le développement à long terme<BR>Les cadres budgétaires intergouvernementaux sont habituellement le reflet de choix sociétaux fondamentaux ainsi que de l’histoire, et n’ont pas pour vocation première d’atteindre des objectifs de politique économique. Pourtant, comme la plupart des modalités institutionnelles, les relations budgétaires influent sur le comportement des entreprises, des ménages et des pouvoirs publics et, partant, sur l’activité économique. Le présent document fait une synthèse des études empiriques consacrées aux effets potentiels de la décentralisation budgétaire sur une série de résultats comme le PIB, la productivité, l’investissement public et les performances des établissements scolaires. Ces résultats peuvent être résumés comme suit : la décentralisation, mesurée en pourcentage des recettes ou des dépenses, est corrélée positivement avec le niveau de PIB par habitant. L’impact semble plus marqué pour la décentralisation des recettes que pour celle des dépenses. La décentralisation semble être fortement et positivement corrélée avec les résultats de l’éducation tels que mesurés par le Programme international pour le suivi des acquis des élèves (PISA). Si les fonctions éducatives peuvent être déléguées soit aux échelons infranationaux de l’administration, soit aux établissements scolaires, les résultats donnent à penser que les deux stratégies semblent également bénéfiques pour les performances des écoles. Enfin, l’investissement dans le capital physique mais, plus particulièrement, dans le capital humain exprimé en part des dépenses des administrations publiques, est nettement plus élevé dans les pays décentralisés.
    Keywords: fiscal federalism, public spending, fiscal decentralisation, education decentralisation, dépenses publiques, fédéralisme budgétaire, décentralisation budgétaire, décentralisation de l’éducation
    JEL: H10 H70 I22
    Date: 2013–06–03
  6. By: Sami Bibi; Jean-Yves Duclos; Abdelkrim Araar
    Abstract: Income mobility is often thought to equalize permanent incomes and thereby to improve social welfare. The welfare analysis of mobility often fails, however, to account for the cost of the variability of periodic incomes around permanent incomes. This paper assesses the net welfare benefit of mobility by assuming both an aversion to inequality in permanent incomes and an aversion to variability in periodic incomes. The paper further investigates the combined (and comparative) impact of mobility and the tax system (another presumed income equalizer) on the dynamics of income across time and on the inequality of income across individuals. Using panel data, we find that Canada’s tax system limits significantly the redistributive impact of mobility while also lowering considerably the cost of income variability. The permanent income equalizing effect of taxes can reach up to 23 percent of mean income at the higher values of inequality aversion that we use. Globally, the net social welfare effect of both mobility and taxation is (almost always) positive and substantial, often amounting to around 30 percent of mean income. For all choices of parameter values, the tax effect exceeds substantially the net effect of mobility on inequality and social welfare.
    Keywords: Mobility, social welfare, risk, income variability, inequality, permanent income
    JEL: D31 D63 H24
    Date: 2013
  7. By: Kaja Fredriksen
    Abstract: Theories of fiscal competition between jurisdictions suggest that investment in productive relative to consumptive spending is higher in a decentralised setting, and that efficiency of the public sector is also higher. This paper empirically analyses the link between decentralisation and the composition of public spending as well as the relation between decentralisation and educational performance. The results suggest that fiscal decentralisation increases the share of public funds directed to capital spending and that the bulk of this shift is due to higher education spending. Using an education production function approach and PISA results (Programme of International Student Assessment) as an indicator of educational output, the results suggest that educational performance is significantly higher in decentralised countries, even when controlling for spending and other variables affecting education. A 10% point increase in decentralisation increases educational performance by four PISA points, thereby improving the PISA ranking by around four country positions on average. Decentralisation to lower government levels and decentralisation to the school level (school autonomy) have a similar impact on educational performance.<P>Décentralisation et croissance économique : Partie 3 : Décentralisation, investissement en infrastructure et performance des établissements scolaires<BR>Les théories de la concurrence budgétaire entre les pays et les entités publiques font penser que l’investissement dans les dépenses de production et non de consommation est plus élevé dans un cadre décentralisé, et que l’efficience du secteur public est supérieure également. La présente note analyse de façon empirique le lien entre décentralisation et performances des établissements scolaires. Les résultats font penser que la décentralisation budgétaire augmente la part de fonds publics axée sur les dépenses en capital, et que l’essentiel de cette évolution est dû à des dépenses dans l’éducation plus élevées. Utilisant une approche de fonction de production dans le domaine de l’éducation ainsi que les résultats du PISA (Programme d’évaluation du suivi des acquis des élèves), comme indicateurs des performances des établissements scolaires, les résultats tendent à montrer que les performances des écoles sont nettement supérieures dans les pays décentralisés, même après prise en compte des dépenses et d’autres variables influant sur l’éducation. La décentralisation à des niveaux infra-gouvernementaux et la décentralisation au niveau des écoles (autonomie des établissements scolaires) ont un impact analogue sur les performances des établissements scolaires.
    Keywords: fiscal decentralisation, fiscal federalism, PISA, public investment, education decentralisation, fédéralisme budgétaire, PISA, décentralisation budgétaire, investissement public, décentralisation de l’éducation
    JEL: H11 H75 I22
    Date: 2013–06–03
  8. By: Jenderny, Katharina
    Abstract: Mobility of top incomes matters for both the openness of the income elite and the share of total income that this group receives. It is thus an important complement information to the growing snapshot literature on top income concentration. I use microlevel panel data of German income tax files that is highly representative for top income households. Top income mobility is assessed in four dimensions: (i) its stability over time, (ii) the degree of mobility between top income fractiles, (iii) the degree of mobility between equally sized groups and mobility in ranks, both of which do not depend on fractile sizes, and (iv) mobility's impact on distributional results. Mobility in terms of annual fractile changes is high between the richest top income fractiles, which is primarily due to tiny fractile sizes. When the fractiles' sizes are controlled for, top income recipients' mobility is lower than that of lower income tax units. --
    Keywords: income distribution,inequality,top incomes
    JEL: D31 D63 H24
    Date: 2013
  9. By: Nora Lustig (Tulane University); Carola Pessino (Universidad del CEMA)
    Abstract: Between 2003 and 2009, Argentina’s social spending as a share of GDP increased by 7.6 percentage points. Marginal benefit incidence analysis for 2003, 2006, and 2009 suggests that the contribution of cash transfers to the reduction of disposable income inequality and poverty rose markedly between 2006 and 2009 primarily due to the launching of a noncontributory pension program – the pension moratorium – in 2004. Noncontributory pensions as a share of GDP rose by 2.2 percentage points between 2003 and 2009 and entailed a redistribution of income to the poor, and from the formal sector pensioners with above minimum pensions to the beneficiaries of the pension moratorium. The redistributive impact of the expansion of public spending on education and health was also sizeable and equalizing, but to a lesser degree. An assessment of fiscal funding sources puts the sustainability of the redistributive policies into question, unless non-social spending is significantly cut.
    Keywords: social spending, benefit incidence, inequality, poverty, Argentina
    JEL: D31 H22 I38
    Date: 2013–01
  10. By: Dharmasena, Senarath; Bryant, Henry L.
    Keywords: Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Political Economy, Public Economics, Research Methods/ Statistical Methods,
    Date: 2013
  11. By: Balázs Égert
    Abstract: This paper puts the original Reinhart-Rogoff dataset, made public by Herndon et al. (2013), to a formal econometric test to pin down debt thresholds endogenously. We show that the nonlinear relation from debt to growth is not very robust. Taken with a pinch of salt, our results suggest, however, that a negative association between debt and growth may set in at debt levels as low as 20% of GDP. Further (and greater) thresholds may exist but their magnitude is highly uncertain. For general government debt (1960-2009), the threshold beyond which this negative relation kicks in is considerably higher at about 50%. Finally, individual country estimates reveal a large amount of cross-country heterogeneity. For some countries including the United States, a nonlinear negative link can be detected at about 30% of GDP. For others, the thresholds are surrounded by a great amount of uncertainty or no nonlinearities can be established. This instability may be a result of threshold effects changing over time within countries and depending on economic conditions, not captured in our estimations. Overall, our results can be seen as a formal econometric confirmation that the 90% public debt threshold is not in the Reinhart-Rogoff data. But our results also seem to suggest that public debt be associated with poor economic performance at fairly moderate public debt levels. If high debt results in low growth, an issue of causality that is not systematically examined in this paper, then this suggests rather low debt-GDP ratios would be appropriate. Furthermore, the absence of threshold effects or low estimated thresholds may not preclude the emergence of further threshold effects, especially as public debt levels are rising to unprecedentedly high levels.<P>Le seuil de la dette publique à 90 % : L'ascension et la chute d'un fait stylisé<BR>Ce document met la base de données originale de Reinhart et Rogoff, rendu public par Herndon et al. (2013), à un test économétrique formelle afin d’identifier des seuils de la dette de façon endogène. Nous montrons que la relation non linéaire de la dette à la croissance n'est pas très robuste. Pris avec une pincée de sel, nos résultats suggèrent, cependant, qu'une association négative entre la dette et la croissance peut exister à un niveau d'endettement aussi bas que 20% du PIB. D'autres seuils (plus élevés) peuvent exister, mais leur ampleur est hautement incertaine. Pour la dette consolidée des administrations publiques (1960 2009), le seuil au-delà duquel cette relation négative entre en action est considérablement plus élevée à environ 50%. Enfin, les estimations des différents pays révèlent une grande hétérogénéité entre les pays. Pour certains pays, dont les États-Unis, un lien négatif non linéaire peut être détecté à environ 30% du PIB. Pour d'autres, les seuils sont entourés d'une grande incertitude ou aucuns effets non-linéaires ne peuvent être établis. Cette instabilité peut être le résultat d'effets de seuil en évolution au fil du temps au sein des pays et en fonction des conditions économiques, ne figurent pas dans nos estimations. Dans l'ensemble, nos résultats peuvent être considérés comme une confirmation économétrique formelle que le seuil de la dette publique à 90% n'est pas dans les données de Reinhart et Rogoff. Mais nos résultats semblent également indiquer que la dette publique est associée à une mauvaise performance économique à des niveaux d'endettement public relativement modérés. Si une dette publique entraine une faible croissance économique, une question de causalité qui n'est pas systématiquement examinée dans le présent document, alors ceci suggère que de plutôt faibles ratios d'endettement publiques du PIB serait approprié. En outre, l'absence d'effets de seuil ou de faibles seuils estimés ne peut pas empêcher l'émergence de nouveaux effets de seuil, d'autant plus que les niveaux de la dette publique sont en hausse à des niveaux sans précédent.
    Keywords: public debt, economic growth, nonlinearity, threshold effects, dette publique, croissance économique, non-linéarité, effet de seuil
    JEL: E6 F3 F4 N4
    Date: 2013–06–06
  12. By: Pablo Hernández de Cos (Banco de España); Enrique Moral-Benito (Banco de España)
    Abstract: What are the output responses to fiscal policy? Despite important advances reported in the literature, quantifying the size of the fiscal multiplier remains a challenge. Indeed, the quest to estimate a unique fiscal multiplier is probably an ill-posed one. The magnitude of the multiplier may well depend on country- and time-specific characteristics of the fiscal stance under scrutiny. In this paper, we estimate state-specific multipliers for Spain depending on the state of the economy in several of its dimensions. The government spending multiplier is estimated to be larger during recessions and periods of banking stress, but much smaller (or even negative) during periods of weak public finances. Combining these three dimensions into a single global turmoil indicator by the use of principal component analysis, the estimated multipliers are 1.4 for crisis (or turbulent) times and 0.6 for tranquil times
    Keywords: fiscal policy, fiscal multiplier
    JEL: E62 H30
    Date: 2013–06
  13. By: John J. Heim (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA)
    Abstract: This large scale econometric study finds private borrowing and spending decline as government deficits grow, due to “crowd out” effect resulting from financing the deficits from the limited pool of available loanable funds, and crowd out completely offsets stimulus effects. This result is found even controlling for business cycle effects, which can cause the same negatively correlated behavior. Separate tests of different types of tax cuts and government spending programs yielded the same result, as did tests of recession versus nonrecession periods. The models, tested on 50 years of data, explain very well the behavior of consumption and investment during the 2007-09 economic crisis, and simulation suggests that, ceteris paribus, stimulus programs of the type and composition of the 2009 Obama stimulus program would have a substantial negative effect on the economy, raising unemployment 1.25% -2.25% during the period they were in force. Negative effects of crowd out on consumer and business borrowing were also found, consistent with the spending findings. This supporting the underlying theory of crowd out, which is that reduced private borrowing (due to crowd out) is responsible for the observed negative relationship between private spending and deficit growth. Several hypotheses proposed by Krugman and others to refute the notion of crowd out negates the stimulus effects of deficits are tested. None are supported by the data. Hypotheses by Gale and Orszag that government transfer spending and federal tax cuts have positive stimulus effects, though others types might not, are tested. The hypotheses are not supported by the data. Well defined structural models of the U. S. economy 1960-2010 are tested. Extensive tests for endogeneity, stationarity, heteroskedasticity, as well as tests for robustness over time, with respect to model specification, and with respect to econometric technique were undertaken. Testing was done in 1st differences, eliminating most nonstationarity and reducing multicollinearity by approximately half. Models explained 90 -95% of the yearly changes of consumption and Investment during the 50 year period. Results were robust for tests of different time periods, generally fitting the data as well for the 1950s and 60s as for the 2000-10 period, and periods in between. Results were also robust for moderate changes to structural models, different regression techniques (OLS, strong and weak instrument 2SLS), and use of different strong 2SLS instruments.
    JEL: C50 C51 E12 E21 E22
    Date: 2013–06
  14. By: Alan Auerbach; Lorenz Kueng; Ronald Lee
    Abstract: Even with well-developed capital markets, there is no private market mechanism for trading between current and future generations, so a potential role for public old-age pension systems is to spread economic and demographic shocks among different generations. This paper evaluates the smoothing and propagation of shocks of three pay-as-you-go public pension schemes, based on the actual U.S. and German systems, which vary in the extent to which they rely on tax adjustments versus benefit adjustments to provide annual cash-flow budget balance. Modifying the Auerbach-Kotlikoff (1987) dynamic general-equilibrium overlapping generations model to incorporate realistic patterns of fertility and mortality and shocks to productivity, fertility and mortality, we evaluate the effectiveness of the three public pension systems at spreading the effects of such shocks. We find that the systems, particularly those that rely to some extent on tax adjustments, are effective at spreading fertility and mortality shocks, but that this is not the case for productivity shocks, for which the pension systems actually tend to concentrate the economic impact. These results suggest that both system design and the source of shocks are important factors in determining the potential of public pension arrangements to spread the burden of shocks.
    JEL: H22 H53 J11
    Date: 2013–06
  15. By: Balázs Égert; Rafał Kierzenkowski
    Abstract: Notwithstanding a very strong economic performance over the past decade or so, Poland’s per capita income is substantially lower in comparison with the United States and per capita income growth will be sharply slowing down over the coming decades under the scenario of gradual policy changes mostly because of population ageing. Bold structural reforms are needed to boost labour productivity and labour resource utilisation. This paper argues that in order to increase labour resource utilisation, policy action should focus on raising the effective retirement age, encourage childbearing and lower high unemployment rates for young people and the unskilled via increased and more efficient active labour market policies. Labour productivity could be boosted via rendering the tax system more growth friendly, reducing product market regulation (including heavy government involvement in the economy, high administrative costs of running and starting businesses and increasing competition in uncompetitive segments of the economy). Investing in human capital and encouraging innovation are also essential for long-term productivity growth.<P>Les défis pour soutenir le modèle de croissance économique en Pologne<BR>En dépit d’une performance économique remarquable au cours de la dernière décennie, le PIB par habitant de la Pologne est nettement plus faible en comparaison avec les États-Unis et la croissance du PIB par tête va fortement ralentir au cours des prochaines décennies, selon un scénario de changements progressifs de politiques économiques essentiellement en raison du vieillissement de la population. Des réformes structurelles audacieuses sont nécessaires pour accroître la productivité du travail et l'utilisation des ressources du travail. Cet article soutient que pour augmenter l'utilisation des ressources du travail, l'action de politique économique devrait se concentrer sur l'augmentation de l'âge effectif du départ à la retraite, d'encourager la maternité et de diminuer les taux de chômage élevés pour les jeunes et les travailleurs peu qualifiés via des politiques actives du marché du travail plus étendues et plus efficaces. La productivité du travail pourrait être stimulée par un système fiscal plus favorable à la croissance, par la réduction de la réglementation des marchés de produits (y compris la forte implication du gouvernement dans l'économie, les coûts administratifs élevés de fonctionnement et de création d'entreprises, et en augmentant la concurrence dans les segments non compétitifs de l'économie). Investir dans le capital humain et encourager l'innovation sont également essentiels pour la croissance de la productivité à long terme.
    Keywords: economic growth, Poland, potential growth, structural reforms, croissance économique, réforme structurelle, Pologne, croissance potentielle
    JEL: E6 F3 F4 N4
    Date: 2013–06–05
  16. By: Knight, John
    Abstract: This paper provides an overview of research on income inequality in China over the period of economic reform. It presents the results of two main sources of evidence on income inequality and, assisted by various decompositions, explains the reasons income inequality has increased rapidly and the Gini coefficient is now almost 0.5. This paper evaluates the degree of income inequality from the perspectives of people's subjective well-being and government concerns. It poses the following question: has income inequality peaked? It also discusses the policy implications of the analysis. The concluding comments of this paper propose a research agenda and suggest possible lessons from China's experience that may be useful for other developing countries.
    Keywords: Rural Poverty Reduction,Inequality,Poverty Impact Evaluation,Services&Transfers to Poor,Labor Policies
    Date: 2013–06–01
  17. By: Konstantins Benkovskis; Ludmila Fadejeva
    Abstract: This paper evaluates the inflation effect of recent VAT rate changes in Latvia by using CPI micro data. Our findings suggest that the pass-through of the tax rate to consumer prices is strong in case of upward tax adjustments, especially when there are no demand restrictions, while the pass-through is weaker for tax reductions. The frequency of price changes peaks at the moment of VAT adjustment, which, however, is partially compensated by lower average size of price revisions. The level of pass-through exhibits a high degree of heterogeneity with higher pass-through for goods, especially food, and lower for services.
    Keywords: VAT, inflation, sample selection model, CPI micro data, Latvia
    JEL: C24 D40 E31 H20
    Date: 2013–06–11
  18. By: Tuomas Malinen (University of Helsinki and HECER)
    Abstract: Recent studies by Atkinson (2011); Rajan (2010); Kumhof and Ranciére (2010); Bordo and Meissner (2013) have assessed the relationship between income inequality and financial stability. Bordo and Meissner found that changes in income inequality do not have an effect on the growth of credit. We extend their study by assessing the relationship between levels of income inequality and leverage. We find that the relationship between inequality and credit is long-run, i.e. trending, in nature and that removing this relation with first differencing will lead to biased inference. In conclusion we find that income inequality is associated with increased leverage in the economy.
    Keywords: top 1% income share, bank loans, unit root, cointegration Classification-JEL: C23, D31, G21
    Date: 2013–03
  19. By: Arjan Ruijs; Herman R.J. Vollebergh
    Abstract: Since 1997, the Netherlands has had a tax allowance scheme that was introduced to promote investments in energy-saving technologies and sustainable energy production. This so-called Energy Investment Tax Allowance (EIA in Dutch) reduces up-front investment costs for firms investing in the newest energy-saving and sustainable energy technologies. The basic design of the EIA has remained the same over the past 15 years. Firms investing in technologies listed in the annually updated ‘Energy List’ may deduct some of the investment costs from their taxable profits in the year of the investment. Compared to investments in conventional reference technologies, the EIA decreases the payback period and reduces the need of financing the investments in energy-saving technologies. The EIA may also reduce search costs made by investors to find particular technologies, because entry on the Energy List equals eligibility for the subsidy. The Energy List contains generic technologies that meet a certain energy-saving standard or a selection of novel, but proven, technologies with a higher energy-saving potential than conventional technologies. Therefore, the list itself is also likely to have an attention value that may contribute to reduce information failures in the market for technology adoption. Over the past 15 years, the EIA has been affected by a number of changes, mainly due to exogenous factors, such as interactions with other policy instruments, rising oil and gas prices, and the economic crisis since 2007. Despite this turbulence and changes in government focus, the EIA remains part of the Dutch energy policy mix. Its flexibility allowed for adaptations where necessary and its role as a subsidy for technology adoption is likely to also have contributed to its legitimacy.<BR>Depuis 1997, les Pays-Bas ont en vigueur un mécanisme de déduction fiscale qui a été adopté pour encourager les investissements dans les technologies d’économie d’énergie et dans la production durable d’énergie. Appelé Energy Investment Tax Allowance (déduction fiscale au titre des investissements énergétiques, EIA en néerlandais), ce dispositif permet de réduire la mise de fonds initiale des entreprises qui investissent dans les technologies les plus récentes d’économie d’énergie ou de l’énergie durable. Le principe fondamental de l’EIA est resté le même pendant les 15 dernières années : les entreprises qui investissent dans les technologies inscrites dans la Liste des technologies de l’énergie – l’‘Energy List’ –, mise à jour tous les ans, peuvent déduire une partie de leurs coûts d’investissement de leurs bénéfices imposables de l’année où l’investissement est effectué. Grâce à l’EIA, les investissements dans les technologies d’économie d’énergie ont un temps de retour et des besoins de financement inférieurs à ceux des investissements dans des technologies conventionnelles de référence. L’EIA permet aussi aux investisseurs d’alléger les dépenses à engager pour trouver telle ou telle technologie, car l’inscription dans la Liste des technologies de l’énergie ouvre droit au subventionnement. Dans cette liste figurent des technologies génériques qui respectent une norme d’économie d’énergie donnée ainsi qu’une sélection de technologies nouvelles, mais éprouvées, dont le potentiel d’économie d’énergie est supérieur à celui des technologies conventionnelles. La liste proprement dite a donc une valeur informative dès lors qu’elle peut contribuer à combler des lacunes d’information sur le marché des technologies. Au cours des 15 dernières années, l’EIA a fait l’objet de plusieurs modifications, découlant surtout de facteurs exogènes tels que des interactions avec d’autres instruments d’action, la hausse des prix du pétrole et du gaz, ou la crise économique depuis 2007. Malgré cette instabilité et les changements de priorités des pouvoirs publics, l’EIA continue de faire partie de l’arsenal de mesures de politique énergétique des Pays-Bas. Sa souplesse a permis les adaptations nécessaires, et son rôle de subvention à l’adoption de technologies a sans doute aussi contribué à sa légitimité.
    Keywords: investment, environment, tax, tax preference, policy evaluation, investissement, environnement, taxe, avantage fiscal, évaluation des politiques
    JEL: H23 H25 H32 O33 Q48
    Date: 2013–04–19
  20. By: Cuesta, Jose
    Abstract: Existing evidence forms a body of"conventional wisdom"on the redistributive impact of fiscal policies that has been recently questioned by more disaggregated analyses. This paper proposes an additional extension to the traditional benefit incidence analysis to explore further the extent to which the conventional wisdom holds, as well as to provide effective guidance in fiscal decision making. The benefit incidence analysis extension includes linking fiscal policies with the concept of equality of opportunities. The paper describes this approach and showcases the application of the proposed"opportunity incidence analysis"to six pilot countries: Liberia, Cote d’Ivoire, Zambia, Tajikistan, Thailand, and Paraguay. Three main contributions stand out: first, opportunity incidence analysis complements traditional benefit incidence analysis by applying its mechanics to a more forward looking concept of equal opportunity. Second, opportunities can be used to target public spending with higher precision. Third, micro-simulations can be used to understand the cost-effectiveness of alternative spending interventions that seek to improve equality of opportunities. All of these results complement the diagnosis produced by traditional incidence analysis and provide useful information to guide specific policy decisions.
    Keywords: Access to Finance,Subnational Economic Development,Public Sector Expenditure Policy,Health Monitoring&Evaluation,Health Systems Development&Reform
    Date: 2013–06–01
  21. By: Herwartz, Helmut; Walle, Yabibal M.
    Abstract: Noting that 'one size does not fit all' in the case of the finance-growth (FG) nexus, a growing body of literature has recently focused on uncovering economic conditions under which financial development could be beneficial (detrimental) to economic development. We look into these conditions by means of a flexible semiparametric approach which allows the long-run FG nexus to depend on measurable economic states. Using annual data for 74 economies spanning the period 1975-2005, we find that the level of financial development shows a strong positive impact on the FG nexus. Moreover, although the impact of finance on growth is generally higher in high-income economies, allowing for intra-group variations reveals scenarios where the impact could be higher in low-income economies. However, the FG link could also be negative if low- and lower-middle-income economies have very large governments or are extremely open to international trade. --
    Keywords: finance-growth nexus,financial development,economic growth,functional coefficient model
    JEL: C14 C33 O16 G28
    Date: 2013

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