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on Public Economics |
| By: | Erlend E. Bø; Joel Slemrod; Thor O. Thoresen (Statistics Norway) |
| Abstract: | Supporters of public disclosure of personal tax information point to its deterrent effect on tax evasion, but this effect has not been empirically explored. Although Norway has a long tradition of public disclosure of tax filings, it took a new direction in 2001 when anyone with access to the Internet could obtain individual information on income, wealth, and income and wealth taxes paid. We exploit this change in the degree of exposure to identify the effects of public disclosure on income reporting. Identification of the deterrence effects of public disclosure is facilitated by the fact that, prior to the shift to the Internet in 2001, some municipalities had exposure which was close to the Internet type of public disclosure, as tax information was distributed widely through paper catalogues that were locally disseminated. We observe income changes that are consistent with public disclosure deterring tax evasion: an approximately 3 percent higher average increase in reported income is found among business owners living in areas where the switch to Internet disclosure represented a large change in access. |
| Keywords: | Tax Evasion; Income reporting; Quasi-experiments |
| JEL: | H24 H26 H30 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:770&r=pbe |
| By: | Kizuku Takao (Graduate School of Economics, Osaka University) |
| Abstract: | Tax changes are often announced before the implementations and are not permanent but only temporary. R&D firms will optimally adjust their investment decision to a tax schedule accordingly. This paper analyzes how anticipated and temporary tax changes dynamically affect the innovation activities. For the purpose, we consider adjustment costs for the investment process and allow firms to make a forward looking investment decision in the framework of an R&D-based endogenous growth model. Calibrating the model with U.S. data, we obtain new insights on how to design the corporate taxation policy. A dividend tax cut is not an effective policy instrument irrespective of how it is implemented. On the other hand, a capital gains tax cut and a rise of the R&D tax credit rate are an effective policy instrument irrespective of how they are implemented. However, the implementation lags of these tax changes worsen the effectiveness of them. |
| Keywords: | Fiscal policy, R&D, Economic growth |
| JEL: | E62 O32 O41 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1410&r=pbe |
| By: | Till Olaf Weber (The University of Nottingham); Jonas Fooken (Joint Research Centre); Benedikt Herrmann (Joint Research Centre) |
| Abstract: | Most traditional tax policies have been based on classical economic models of tax payers as decision makers.As in many fields where humans make decision, however, more integrated behavioural economic models, that is, models that take into account both psychological and purely economic factors can provide further insights.Therefore, a large literature in the field on the behavioural economics of taxation exists. This report summarizes central parts of this literature, reviewing mainly experimental and observational studies in the academic literature to be informative for policy-makers. It also provides a potential agenda for future research and application of behavioural economic policies with regard to tax compliance. |
| Keywords: | Tax compliance, behavioural economics, economic experiments, survey |
| JEL: | D03 H26 H41 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0041&r=pbe |
| By: | Cialani, Catia (Department of Economics, Umeå School of Business and Economics) |
| Abstract: | This thesis consists of a summary and four self-contained papers. Paper [I] Following the 1987 report by The World Commission on Environment and Development, the genuine saving has come to play a key role in the context of sustainable development, and the World Bank regularly publishes numbers for genuine saving on a national basis. However, these numbers are typically calculated as if the tax system is non-distortionary. This paper presents an analogue to genuine saving in a second best economy, where the government raises revenue by means of distortionary taxation. We show how the social cost of public debt, which depends on the marginal excess burden, ought to be reflected in the genuine saving. We also illustrate by presenting calculations for Greece, Japan, Portugal, U.K., U.S. and OECD average, showing that the numbers published by the World Bank are likely to be biased and may even give incorrect information as to whether the economy is locally sustainable. Paper [II] This paper examines the relationships among per capita CO2 emissions, per capita GDP and international trade based on panel data spanning the period 1960-2008 for 150 countries. A distinction is also made between OECD and Non-OECD countries to capture the differences of this relationship between developed and developing economies. We apply panel unit root and cointegration tests, and estimate a panel error correction model. The results from the error correction model suggest that there are long-term relationships between the variables for the whole sample and for Non-OECD countries. Finally, Granger causality tests show that there is bidirectional short-term causality between per capita GDP and international trade for the whole sample and between per capita GDP and CO2 emissions for OECD countries. Paper [III] Fundamental questions in economics are why some regions are richer than others, why their growth rates differ, whether their growth rates tend to converge, and what key factors contribute to explain economic growth. This paper deals with the average income growth, net migration, and changes in unemployment rates at the municipal level in Sweden. The aim is to explore in depth the effects of possible underlying determinants with a particular focus on local policy variables. The analysis is based on a three-equation model. Our results show, among other things, that increases in the local public expenditure and income taxe rate have negative effects on subsequent income income growth. In addition, the results show conditional convergence, i.e. that the average income among the municipal residents tends to grow more rapidly in relatively poor local jurisdictions than in initially “richer” jurisdictions, conditional on the other explanatory variables. Paper [IV] This paper explores the relationship between income growth and income inequality using data at the municipal level in Sweden for the period 1992-2007. We estimate a fixed effects panel data growth model, where the within-municipality income inequality is one of the explanatory variables. Different inequality measures (Gini coefficient, top income shares, and measures of inequality in the lower and upper part of the income distribution) are examined. We find a positive and significant relationship between income growth and income inequality measured as the Gini coefficient and top income shares, respectively. In addition, while inequality in the upper part of the income distribution is positively associated with the income growth rate, inequality in the lower part of the income distribution seems to be negatively related to the income growth. Our findings also suggest that increased income inequality enhances growth more in municipalities with a high level of average income than in municipalities with a low level of average income. |
| Keywords: | Genuine saving; welfare change; taxation; per capita GDP; per capita CO2; international trade; net migration; unemployment; growth; inequality |
| JEL: | C33 D31 D60 D63 E24 H21 I31 O47 Q28 Q48 Q56 R11 R23 |
| Date: | 2014–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0875&r=pbe |
| By: | Robin Boadway; Michael Keen |
| Abstract: | A fundamental issues in designing any fiscal regime for non-renewable resources is the balance between rent taxes and royalties. This paper reviews the core issues that arise, in terms of both efficient rent extraction and correcting various market failures. Issues of asymmetric information, for instance, can rationalize using both instruments. The paper also shows that, even though they effectively involve the choice of distinct parameters at several dates, rent taxes are not subject to the time consistency problem that is central to the extractive industries, but royalties are (although time consistent royalty policy is efficient conditional on initial resource stocks). |
| Keywords: | rent tax, royalties, resource taxation |
| JEL: | H21 H25 Q30 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4568&r=pbe |
| By: | Kirill Borissov; Joseph Hanna (Laboratoire IDP, Universite de Valenciennes et du Hainaut-Cambresis); Stephane Lambrecht |
| Abstract: | We study a parametric politico-economic model of economic growth with productive public goods and public consumption goods. The provision of public goods is funded by a proportional tax on consumers' income. Agents are heterogeneous in their initial capital endowments, discount factors and the relative weights of public consumption in overall private utility. They vote on the shares of public goods in GDP. We propose a definition of voting equilibrium, prove the existence and provide a characterization of voting equilibria, and obtain a closed-form solution for the voting outcomes. |
| Keywords: | : intertemporal choice, growth, public goods, voting |
| JEL: | D91 O41 H41 D72 |
| Date: | 2014–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:eus:wpaper:ec0114&r=pbe |
| By: | Karen Davtyan (Faculty of Economics, University of Barcelona) |
| Abstract: | The interrelation among economic growth, income inequality, and fiscal performance is very complex. The paper provides the analysis of the interrelations among these variables jointly by the structural VAR methodology, examining also transmission channels among them. This approach allows exploring dynamic interactions among them and feedback effects on each other. The empirical analysis is implemented for the Anglo-Saxon countries, the UK, the USA, and Canada. We find that income inequality has negative effect on economic growth in the case of the UK. The effect is positive in the cases of the USA and Canada. The increase in income inequality worsens fiscal performance for all the countries. |
| Keywords: | economic growth, income inequality, fiscal performance, VAR JEL classification: C32, D31, E62, O47 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ira:wpaper:201405&r=pbe |
| By: | The Consortium consisting of Ramboll Management Consulting, The Evaluation Partnership and Europe Economic Research |
| Abstract: | This study reviews, assesses and compares twelve methodologies which can be used for measuring compliance costs of taxation. These methodologies are: the Standard Cost Model (SCM), Paying Taxes, the Taxpayer/Business Burden Model, the Total Cost of Regulation to Business (TCR), the Scanning Instrument Regulations of Other Compliance Costs (SIROCCO), the Regulatory Check-up Model (RCM), Guidelines on the Identification and Presentation of Compliance Costs in Legislative Proposals by the Federal Government (GIPCC), the Cost-Driven Approach to Regulatory Burden (CAR), the Complexity Index of the UK Office of Tax Simplification, the Total Cost to Serve (TCS), the Tax Information and Impact Note (TIIN), and the Bureaucracy Cost Index (BKI). |
| Keywords: | European Union, taxation, tax compliance costs |
| JEL: | H20 H29 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0040&r=pbe |
| By: | Michael Kuklik (Long Island University); Nikita Céspedes (Central Bank of Peru) |
| Abstract: | The optimal capital income tax rate is 36 percent as reported by Conesa, Kitao, and Krueger (2009). This result is mainly driven by the market incompleteness as well as the endogenous labor supply in a life-cycle framework. We show that this model fails to account for the basic life-cycle features of the labor supply observed in the U.S. data. In this paper, we introduce into this model non-linear wages and inter-vivos transfers into this model in order to account for the life-cycle features of labor supply. The former makes hours of work highly persistent and helps to account for labor choices at the extensive margin over the life cycle. The latter allows us to account for labor choices early in life. The suggested model delivers an optimal capital income tax rate of 7.4 percent, which is significantly lower than what Conesa, Kitao, and Krueger (2009) found. |
| Keywords: | Labor supply, optimal taxation, capital taxation, non-linear wage, inter-vivos transfer |
| JEL: | E13 H21 H24 H25 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:apc:wpaper:2014-008&r=pbe |
| By: | Berck, Peter (Department of Agricultural and Resource Economics and Policy); Tano, Sofia (Department of Economics, Umeå School of Business and Economics); Westerlund, Olle (Department of Economics, Umeå School of Business and Economics) |
| Abstract: | Migration rates are highest among young adults, especially students, and their location choices affect the regional distribution of human capital, growth and local public sector budgets. Using Swedish register data on young adults, the choice of whether to enroll in education and the choice of location are estimated jointly. The results indicate a systematic selection into investment in further education based on school grades and associated preferences for locations with higher per capita tax bases. For students, the estimates indicate lower preferences for locations with higher shares of older people. The importance of family networks for the choice of location is confirmed. |
| Keywords: | Agglomeration; human capital; local public sector; location choice |
| JEL: | J24 J61 R23 |
| Date: | 2014–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0878&r=pbe |
| By: | Patricia Apps; Ray Rees |
| Abstract: | This paper presents the properties of optimal piecewise linear tax systems for two-earner households, based on joint and individual incomes respectively. A key contribution is the analysis of the interaction between second earner wage differences, variation in the price of child care and domestic productivity differences as determinants of across-household heterogeneity in second earner labour supply, and of the resulting relationship between household income and the wellbeing of household members. A central result is that taking account of a richer and more realistic specification of household time use widens the set of cases in which individual taxation is welfare-superior. |
| Keywords: | optimal taxation, labour supply, time use, child care, household production, inequality |
| JEL: | H21 J22 H31 H24 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4578&r=pbe |
| By: | Ali Abcha |
| Abstract: | This paper is an empirical study that aims at explaining economic fluctuations and behavior mark-up. Inspired by the method of Roeger (1995), we perform a study of four OECD countries (Denmark, Finland, Italy and the United States) for 17 manufacturing industries covering the period 1986-2008. This study provides a comparison between our estimates of mark-up and other observations on mark-up pricing (Oliveira, Scarpetta and Pilat (1996), Roger (1995) and Rotemberg and Woodford (1992)). It also provides an interpretation of the estimated markups that depend on the type of market structure. An application of a VAR model is used to examine the relationship between imperfect competition and the effects fiscal policy on output and mark-up, based on the method of Rotemberg and Woodford (1999). |
| Keywords: | Mark-up, Imperfect competition, Fiscal Policy |
| JEL: | E3 E62 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2014-11&r=pbe |
| By: | Andreas Bernecker |
| Abstract: | Divided government is often thought of as causing legislative deadlock. I investigate the link between divided government and economic reforms using a novel data set on welfare reforms in US states between 1978 and 2010. Panel data regressions show that under divided government a US state is around 25% more likely to adopt a welfare reform than under unified government. An analysis of close elections providing quasi-random variation in the form of government and other robustness checks confirm this counter-intuitive finding. The empirical evidence is consistent with an explanation based on policy competition between governor, senate, and house. |
| Keywords: | divided government, legislative deadlock, policy innovation, US welfare reform, policy competition |
| JEL: | D72 D78 H11 H75 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4564&r=pbe |
| By: | Michael Carter; John Morrow |
| Abstract: | Abstract Commentators on the `East Asian Miracle' of inclusive growth have often pointed toward shared rural growth policies. But why were these policies not chosen elsewhere? This paper models voters who invest in either subsistence or a complex technology in which public goods complement private capital. Investment and technology choices vary with wealth and the level of public goods enforced by political lobbies. Outcomes depend on the strength of the incipient middle class who bolster political incentives through contributions. Economies with a stronger middle class due to lower inequality or lower risk may thereby sustain higher productivity through public good provision. |
| Keywords: | Poverty traps, political economy, inequality, lobby formation |
| JEL: | O1 D2 H4 Q1 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp1259&r=pbe |
| By: | Mauro Napoletano (OFCE); Andrea Roventini (Department of economics); Giovanni Dosi (Laboratory of Economics and Management); Giorgio Fagiolo (Laboratory of Economics and Management (LEM)); Tania Treibich |
| Abstract: | In this paper we explore the effects of alternative combinations of fiscal and monetary policies under different income distribution regimes. In particular, we aim at evaluating fiscal rules in economies subject to banking crises and deep recessions. We do so using an agent-based model populated by heterogeneous capital- and consumption-good forms, heterogeneous banks, workers/consumers, a Central Bank and a Government. We show that the model is able to reproduce a wide array of macro and micro empirical regularities, including stylised facts concerning financial dynamics and banking crises. Simulation results suggest that the most appropriate policy mix to stabilise the economy requires unconstrained counter-cyclical fiscal policies, where automatic stabilisers are free to dampen business cycles fluctuations, and a monetary policy targeting also employment. Instead, discipline-guided" fiscal rules such as the Stability and Growth Pact or the Fiscal Compact in the Eurozone always depress the economy, without improving public finances, even when escape clauses in case of recessions are considered. Consequently, austerity policies appear to be in general self-defeating. Furthermore, we show that the negative effects of austere fiscal rules are magnified by conservative monetary policies focused on ination stabilisation only. Finally, the effects of monetary and fiscal policies become sharper as the level of income inequality increases. |
| Keywords: | Agent based model; fiscal policy; monetary policy; banking crises; income inequality; austerity policies; disequilibrium dynamics |
| JEL: | C63 E32 E6 E52 G21 O4 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/f6h8764enu2lskk9p6go0e900&r=pbe |
| By: | Christian Dreger; Hans-Eggert Reimers |
| Abstract: | This paper explores the long run relationship between public and private investment in the euro area in terms of capital stocks and gross investment flows. Panel techniques accounting for international spillovers are employed. While private and public capital stocks are cointegrated, the evidence is quite fragile for public and private investment flows. They enter a long run relationship only after fundamental drivers of private investment, such as demand and financing costs are included. According to the impulse response analysis, private investment reacts to shocks in public investment both in terms of stock and flow variables. In contrast, public investment is rather exogenous. Therefore, the lack of public investment might have restricted private investment and GDP growth in the euro area. The results have strong implications for the future direction of fiscal austerity programs to combat the euro area debt crisis. |
| Keywords: | Public and private investment, fiscal austerity, panel VAR |
| JEL: | C23 E22 E62 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1365&r=pbe |
| By: | Tano, Sofia (Department of Economics, Umeå School of Business and Economics) |
| Abstract: | The spatial distribution of human capital plays a fundamental role for regional differences in economic growth and welfare. This paper examines how individual ability indicated by the grade point average (GPA), from comprehensive school, affects the probability of migration among young university graduates in Sweden. Using detailed micro data available from the Swedish population registers, the study examines two cohorts of individuals who enrol in tertiary education. The results indicate that individual abilities reflected by the GPA are strongly influential when it comes to completing a university degree and for the migration decision after graduation. Moreover, there is a positive relationship between the GPA and the choice of migrating from regions with a relatively low tax base and a relatively small share of highly educated people in the population. Analogously, individuals with a high GPA tend to stay at a higher rate in more flourishing regions. |
| Keywords: | Bivariate probit; individual ability; migration; regional clustering; university graduates |
| JEL: | I23 J24 R23 |
| Date: | 2014–02–26 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0879&r=pbe |
| By: | Julien Gourdon; Stéphanie Monjon; Sandra Poncet |
| Abstract: | During the last decade, the Chinese government has frequently changed the value added tax (VAT) refund levels offered to exporters. Indeed, China's VAT system is not neutral, in particular because the exporters may not receive complete refund of the domestic VAT paid on their inputs. This paper investigates how changes in the VAT rebates affect export performance in China. Our empirical analysis relies on export volume data at the HS6 product level over the 2003-12 period. To address potential endogeneity, we exploit an eligibility rule that disqualifies processing trade with supplied materials from the rebates. We find that the adjustments to the VAT rebates have significant repercussions on the exported volume: a one percentage point increase in the VAT rebate can lead to a 7% increase in export volumes. This magnitude allows to better understand the strong resistance of China's exports amid the global recession. |
| Keywords: | VAT system;Export tax;Export performance;China |
| JEL: | F10 F14 O14 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2014-05&r=pbe |
| By: | Winters, L. Alan (Asian Development Bank Institute) |
| Abstract: | This paper covers threes issues: first, defining and measuring inclusive growth; second, the relationship between international trade and inequality; and third, the links between infrastructure and inequality. Both international trade and infrastructure make it easier for people to exchange goods and services and to increase income by allowing specialization, economies of scale, variety, etc. The gains are important not only in aggregate, but also at an individual level, and different people’s ability to take advantage of them varies. Hence each can increase inequality. Critical to sharing the gains from trade is mobility—specifically labor mobility, which determines the capacity of people to move from areas, sectors, skills, or firms of low or declining opportunity to those of higher opportunity. In the context of inclusive growth, this constitutes a challenge. However, the answer should not be to eschew opening up the economy or building infrastructure, but to do so in an informed way and seek to undertake complementary policies that help the less well-off take advantage of them. |
| Keywords: | trade; infrastructure; inequality; labor mobility; trade opening; globalization |
| JEL: | F16 H54 |
| Date: | 2014–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0464&r=pbe |
| By: | Miranda Sarmento, J.; Renneboog, L.D.R. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: This paper presents the main reasons why public-private partnerships (PPPs) are adopted as well as the possible disadvantages for the public and private sectors. By means of two case studies on bridge construction and railway infrastructure (Fertagus and Lusoponte), we elucidate how a PPP is structured and financed. Furthermore, the two case studies illustrate how the renegotiation processes are conducted when the public-private contracts have to be altered and what determines (un)successful renegotiations. |
| Keywords: | Public–Private Partnerships;Concessions;Renegotiations;Public Procurement;Project Risk |
| JEL: | G32 H54 L91 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2014017&r=pbe |
| By: | Manoj Atolia; Yoshinori Kurokawa |
| Abstract: | Dew-Becker and Gordon (2005) document new findings regarding income inequality in the U.S. over the period of 1966-2001 based on Internal Revenue Service (IRS) micro data. In particular, they found that the mean real income has grown faster than the median real income because half of the income gains in the U.S. went to the top 10 percent of the income distribution. Although one-half of this inequality effect is attributable to gains of the 90th percentile over the 10th percentile (below-top inequality), the other half is due to increased skewness within the top 10 percent (within-top inequality). This paper develops a simple model that provides a unified explanation of these facts as they pertain to both below- and within-top inequality. We show that under differences in the flexibility of skills--modeled according to the work of Mitchell (2005) as differences in the setup costs required to combine a given number of intermediate goods/tasks--an increase in task variety due to a decrease in fixed costs of entry can be a source of these income changes. The decrease in fixed costs of entry may be caused by technological change and/or entry deregulation. Furthermore, we show that trade, immigration, and labor institutions can also be catalysts for these types of income changes as a result of their respective effects on task variety. Therefore, even if technological change is similar everywhere, even slight cross-country differences in other factors can cause cross-country differences in the top skewness. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:tsu:tewpjp:2014-001&r=pbe |
| By: | Zhuang, Juzhong (Asian Development Bank Institute); Kanbur, Ravi (Asian Development Bank Institute); Rhee, Changyong (Asian Development Bank Institute) |
| Abstract: | This paper looks at the recent trends of rising inequality in developing Asia, asks why inequality matters, examines the driving forces of rising inequality, and proposes policy options for tackling high and rising inequality. Technological change, globalization, and market-oriented reform have driven Asia’s rapid growth, but have also had significant distributional consequences. These factors have favored owners of capital over labor, skilled over unskilled workers, and urban and coastal areas over rural and inland regions. Furthermore, unequal access to opportunity, caused by institutional weaknesses and social exclusion, has compounded the impacts of these forces. All these combined have led to a falling share of labor income in national income, increasing premiums on human capital, and growing spatial disparity—all contributing to rising inequality. The three drivers of rising inequality cannot and should not be blocked, because they are the same forces that drive productivity and income growth. This paper outlines a number of policy options for Asian policy makers to consider in addressing rising inequality. These options, aiming to equalize opportunities and, thereby, reduce inequality, include efficient fiscal measures that reduce inequality in human capital, policies that work toward increasing the number and quality of jobs, interventions that narrow spatial disparity, and reforms that strengthen governance, level the playing field, and eliminate social exclusion. |
| Keywords: | growth; globalization; inequality; governance |
| JEL: | D63 O15 O53 |
| Date: | 2014–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0463&r=pbe |
| By: | Francesco Nava; Michele Piccione |
| Abstract: | The paper discusses community enforcement in infinitely repeated, two-action games with local interaction and uncertain monitoring. Each player interacts with and observes only a fixed set of opponents, of whom he is privately informed. the main result shows that when beliefs about the monitoring structure have full support, efficiency can be sustained with sequential equilibria that are independent of the players' beliefs. Stronger results are obtained when only acyclic monitoring structures are allowed or players have unit discount rates. These equilibria satisfy numerous robustness properties. |
| JEL: | J1 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:54250&r=pbe |
| By: | Schnellenbach, Jan; Schubert, Christian |
| Abstract: | Public choice theory has originally been motivated by the need to correct the asymmetry, widespread in traditional welfare economics, between the motivational assumptions of market participants and policymakers: Those who played the game of politics should also be considered rational and self-interested. History repeats itself with the rise of behavioral economics: Cognitive biases discovered in market participants often induce a call for rational governments to intervene. Recently, however, behavioral economics has also been applied to the explanatory analysis of the political process. This paper surveys the current state of the emerging field of 'behavioral public choice' and considers the scope for further research. -- |
| Keywords: | Behavioral Public Choice,Behavioral Economics,Rational Irrationality,Cognitive Biases,Social Norms,Voting,Paternalism |
| JEL: | D78 D03 A12 D72 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:aluord:1403&r=pbe |
| By: | Cuong Le Van; Cagri Saglam; Agah Turan |
| Abstract: | We consider an economy in which the technology exhibits nonconvexities due to fixed costs associated with production. Taking into account the incentives for investment to decrease the fixed costs, we characterize the circumstances under which an underdeveloped economy can catch up with the developing ones. We show that it is optimal to get rid of the fixed costs inherent in production at a finite period of time so that the economy will eventually converge to a positive steady state level of per capita income independent of the initial level of capital stock. Indeed, we obtain that even though the income disparities may be very persistent and can be perceived as poverty traps, all economies would ultimately converge to the same steady state level of per capita income. |
| Keywords: | Optimal Growth, Nonconvex technology, Poverty trap |
| JEL: | C61 O41 O47 |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-123&r=pbe |
| By: | Françoise Lemoine; Grégoire Mayo; Sandra Poncet; Deniz Ünal |
| Abstract: | Since the mid-2000s, the center of gravity of China's economic growth has shifted from the coastline to the inland and the gap in GDP per capita between the two areas has narrowed. This macroeconomic catch-up reflects, with a time lag, the convergence process which has been at work in manufacturing industry since the end of the 1990s and suggests that China is becoming increasingly integrated in terms of technological level. This pattern is in line with a process whereby the inland catches up the labor productivity level of the coast thanks to the transfer of technology and capital from these most advanced regions. |
| Keywords: | China;Regional inequality;Manufacturing industry;Convergence;Growth |
| JEL: | O14 O25 O53 R12 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2014-04&r=pbe |