nep-pbe New Economics Papers
on Public Economics
Issue of 2014‒10‒17
twenty papers chosen by
Keunjae Lee
Pusan National University

  1. Economic Growth and Optimal Income Tax Evasion By Oscar Mauricio VALENCIA ARANA
  2. Tax Reforms and Tax Burdens in selected OECD countries By Katerina MAKOVA
  3. Fiscal Devaluation and Structural Gaps. By F. Langot; L. Patureau; T. Sopraseuth
  4. Environmental and Economic Effects of Carbon Tax By Hassan MOEENNEMATI
  5. Taxation Of R&D: Review Of Practices By Galina A. Kitova
  6. On the Long-Term Macroeconomic Effects of Social Security Spending: Evidence for 12 EU Countries By Alfredo M. Pereira; Jorge M. Andraz
  7. Optimal Tax Progressivity in Unionised Labour Markets: What are the Driving Forces? By Stefan BOETERS
  8. So Slow to Change: The Limited Growth of Non-Tax Revenues in Public Education Finance, 1991-2010 By Tom Downes; Keiran M. Killeen
  9. Recessions, Inequality, and Democratization By Paul Maarek; Michael T. Dorsch
  10. Competition in the Provision of Local Public Goods By Alexandra Petermann Reifschneider
  11. Non-spatial Government Policies and Regional Income Inequality in Brazil By Carlos AZZONI; Raul SILVEIRA-NETO
  12. Government Size Threshold and Economic Growth in Iran By Esmaiel ABOUNOORI; Younes NADEMI
  13. Fiscal policy: ex ante and ex post By Croushore, Dean; van Norden, Simon
  14. Economic Growth and Redistribution Policy: the Role of Fiscal Policy in South Africa By Lumengo Bonga-Bonga
  15. Government Debt and the Excess Sensitivity of Private Consumption to Current Income: An Empirical Analysis for OECD Countries By POZZI Lorenzo; HEYLEN Freddy; DOSSCHE Maarten
  16. Decentralization and the Quality of the Government Levels By Juan VICENTE-PERDIZ; Javier SALINAS SANCHEZ
  17. Optimal Demogrants and Taxes in a Federal Welfare State Creation Date: 1992 By R. Ray
  18. Fiscal Devolution in a Small Open Regional Economy By James Foreman-Peck; Laurian Lungu; Patrick Minford
  19. Layoff Taxes and Minimum Wage. Two Complementary Public Policies. By Thérèse REBIÈRE; Frédéric GAVREL; Isabelle LEBON
  20. The Growing Income Inequality in China: Evidence, Causes, and Policy Choices By Baotai WANG

  1. By: Oscar Mauricio VALENCIA ARANA
  2. By: Katerina MAKOVA
  3. By: F. Langot; L. Patureau; T. Sopraseuth
    Abstract: The paper characterizes the optimal tax scheme in an open economy with structural inefficiencies on the labor market and on government size. On analytical grounds first, we show that the economy can use fiscal revaluation to exploit the terms of trade externality and to dampen the impact of an excessive public spending. However, if real labor market rigidities are large enough, fiscal devaluation may be desirable. Second, we provide a quantitative assessment of the optimal tax reform using France as the benchmark economy. Our results show that France would benefit more from fiscal devaluation than a economy where the labor market is more flexible, as the US. We also show that the welfare gains from the optimal tax reform crucially depend on the ability of the government to target its optimal size.
    Keywords: Consumption tax, payroll tax, Ramsey allocation, labor market search, open economy, public spending.
    JEL: E27 E62 H21 J38
    Date: 2014
  4. By: Hassan MOEENNEMATI
  5. By: Galina A. Kitova (National Research University Higher School of Economics)
    Abstract: In recent years R&D tax incentives have been characterized by increasing scale and spread on innovation activity. Approaches to integrated R&D tax incentives into "recipes" for long-term growth and competitiveness were developed and tested in many countries. For exam-ple, only 12 OECD members employed R&D tax incentives in 1995, but 27 members do so in 2013 (as well as Brazil, China, India, Russia and other countries). And their share of total government expenditure on R&D (direct and tax) by OECD member countries reached at least a third. These trends have accompanied the development and testing of approaches to estimate the costs of tax support for R&D (including tax expenditures) and its effects and to ensure that they are internationally compatible. As for Russia, there are no officially accepted estimates of the scale and effectiveness of R&D and innovation tax support yet, though efforts to calculate them have been under way since 2010. This paper includes the current state of empirical research of tax support for R&D and in-novation in the Russian Federation, as well as a survey of the demand for its tools from research institutes, universities performing R&D, and manufacturing enterprises, which was conducted in 2012-2013. The results obtained demonstrate the power of empirical analysis and optimization of R&D and innovation tax incentives in the Russian Federation, against the background of the field's best practices and current trends.
    Keywords: R&D, innovation, tax incentives, tax expenditures, demand for R&D and in-novation tax incentives.
    JEL: H21 H22 H25
    Date: 2014
  6. By: Alfredo M. Pereira (Department of Economics, College of William and Mary, Williamsburg); Jorge M. Andraz (Faculdade de Economia, Universidade do Algarve, CEFAGE (UALG))
    Abstract: We estimate the long-term impact of social security and social protection spending in a set of twelve EU countries. We estimate country-specific VARs relating GDP, unemployment, savings, and social spending. We find that social spending has a negative effect in most countries while the effects on savings are either not significant or positive but small. In turn, the negative effects on output are significant and in some cases large. Unemployment is the dominant channel through which social spending affects output. Our results imply that any increase in generosity would, under the current situation, bring detrimental macroeconomic effects. In addition, a less distortionary tax mix should be used to finance redistributive spending and the insurance component of the systems should be changed in the direction of a capitalization regime based on defined contributions. Obviously, this transition would take time and would not be costless but neither is maintaining the status quo.
    Keywords: Social security spending; Unemployment; Saving; Output; Fiscal multipliers; VAR; EU.
    JEL: C32 C51 C52 H55
    Date: 2014
  7. By: Stefan BOETERS
  8. By: Tom Downes; Keiran M. Killeen
    Abstract: We examine changes in the use of nontax revenues for education finance from 1991-2010. Beyond the summary of usage over time, we ask whether non- traditional revenues like fees accentuate or mitigate the impact of downturns. More generally, we examine the extent to which school districts have responded to fiscal pressures by turning to nontax revenues. We also document the extent to which the use of nontax revenues varies across according to student poverty status. We show that alternative revenues continue to be a small source of local revenues and have increased quite little since the early 1990s. There was at most a minimal shift to nontax revenues in downturns, though there is evidence of greater use of these revenues among school districts facing more permanent fiscal pressures like tax limits. Differential access to fee revenues and other alternative revenues during downturns may slightly accentuate inequities in K-12 education spending.
  9. By: Paul Maarek; Michael T. Dorsch (Université de Cergy-Pontoise, THEMA; University of Cambridge, and IISS (The Hague).)
    Abstract: This paper explores the extent to which episodes of democratization can be explained by variation in income inequality. Modern empirical tests of this relationship have generally yielded null results, which we argue follow from the estimation of mis-specified models. Guided by a theoretical nuance of the new economic view of democratization proposed by Acemoglu and Robinson (2001), our empirical examination considers the possibility that the effect of income inequality on democratization may be heterogeneous across the business cycle. Employing fixed effects regressions over a panel of autocratic countries, we demonstrate that variation in income inequality can explain democratization following recessions, but that there is no statistically significant relationship following periods of economic growth.
    Keywords: Democratization, distributive conflict, inequality, window of opportunity
    JEL: D72 D74 O15 P16 P48
    Date: 2014
  10. By: Alexandra Petermann Reifschneider
  11. By: Carlos AZZONI; Raul SILVEIRA-NETO
  12. By: Esmaiel ABOUNOORI; Younes NADEMI
  13. By: Croushore, Dean (Federal Reserve Bank of Philadelphia); van Norden, Simon (Federal Reserve Bank of Philadelphia)
    Abstract: The surge in fiscal deficits since 2008 has put a renewed focus on the authors’ understanding of fiscal policy. The interaction of fiscal and monetary policy during this period has also been the subject of much discussion and analysis. This paper gives new insight into past fiscal policy and its influence on monetary policy by examining the U.S. Federal Reserve Board staff’s Greenbook forecasts of fiscal policy. The authors create a real-time database of the Greenbook forecasts of fiscal policy, examine the forecast performance in terms of bias and effciency, and explore the implications for the interaction of fiscal policy and monetary policy. The authors also attempt to provide advice for fiscal policy by showing how policymakers learn over time about the trajectory of the U.S. federal government’s fiscal balance as well as the changing roles of structural and cyclical factors.
    Keywords: Fiscal policy; Deficits; Forecasting; FOMC; Greenbook
    JEL: E62 H68
    Date: 2014–09–22
  14. By: Lumengo Bonga-Bonga
  15. By: POZZI Lorenzo; HEYLEN Freddy; DOSSCHE Maarten
  17. By: R. Ray
  18. By: James Foreman-Peck; Laurian Lungu; Patrick Minford
  19. By: Thérèse REBIÈRE; Frédéric GAVREL; Isabelle LEBON
  20. By: Baotai WANG

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