nep-pbe New Economics Papers
on Public Economics
Issue of 2015‒02‒28
24 papers chosen by
Thomas Andrén

  1. Macroeconomic Implications of Tax Cuts for the Top Income Groups: 1960 - 2010 By Markus Poschke ; Baris Kaymak
  2. Shifting Taxes from Labour to Property: A Simulation under Labour Market Equilibrium By Moscarola, Flavia Coda ; Colombino, Ugo ; Figari, Francesco ; Locatelli, Marilena
  3. Differential Taxation and Occupational Choice By Renato Gomes ; Jean-Marie Lozachmeur ; Alessandro Pavan
  4. Tax Policy and Food Security By Gopalakrishnan, Pawan ; Saha, Anuradha
  5. Welfare state generosity and student performance: Evidence from international student tests By Falch, Torberg ; Fischer, Justina A.V.
  6. Income Taxes, Sorting, and the Costs of Housing: Evidence from Municipal Boundaries in Switzerland By Christoph Basten ; Maximilian von Ehrlich ; Andrea Lassmann
  7. Motivating innovation in a knowledge economy with tax incentives By Diego d'Andria ; Ivan Savin
  8. The Coalition's Record on Cash Transfers, Poverty and Inequality 2010-2015 By John Hills
  9. When does inter-jurisdictional competition engender a "race to the bottom"?: a meta-regression analysis By Joan Costa-i-Font ; Filipe De-Albuquerque ; Hristos Doucouliagos
  10. Progressivity and decomposition of VAT in the Mexican border, 2014 By Luis Huesca ; Arturo Robles Valencia ; Abdelkrim Araar
  11. Household Bargaining and the Design of Couples' Income Taxation By Cremer, Helmuth ; Lozachmeur, Jean-Marie ; Maldonado, Dario ; Roeder, Kerstin
  12. An empirical assessment of households sorting into private schooling under public education provision By Francesco Andreoli ; Giorgia Casalone ; Daniela Sonedda
  13. The Welfare State and Migration: A Dynamic Analysis of Political Coalitions By Razin, Assaf ; Sadka, Efraim ; Suwankiri, Benjarong
  14. The Impact of Immigrants on Public Finances: A Forecast Analysis for Denmark By Hansen, Marianne Frank ; Schultz-Nielsen, Marie Louise ; Tranæs, Torben
  15. The income distribution in the UK: A picture of advantage and disadvantage By Stephen P Jenkins
  16. How Many Educated Workers for Your Economy? European Targets, Optimal Public Spending, and Labor Market Impact By Lebon, Isabelle ; Rebiere, Therese
  17. Optimal Unemployment Insurance: Consumption versus Expenditure By Rodolfo Campos ; Iliana Reggio
  18. Refugee immigration and public finances in Sweden By Ruist, Joakim
  19. Overlapping political budget cycles in the legislative and the executive By Dirk Foremny ; Ronny Freier ; Marc-Daniel Moessinger ; Mustafa Yeter
  20. Measuring the effect of informal work and domestic activities on poverty and income inequality in Turkey. By Armagan Tuna Aktuna-Gunes
  21. The Welfare Effects of Asset Means-Testing Income Support By Wellschmied, Felix
  22. Economic Shocks and Internal Migration By Monras, Joan
  23. Wealth distribution and asset prices By Dan Cao ; Jinhui Bai
  24. Log-Transform Kernel Density Estimation of Income Distribution By Arthur Charpentier ; Emmanuel Flachaire

  1. By: Markus Poschke (McGill University, Montreal ); Baris Kaymak (Universite de Montreal )
    Abstract: Over the last 40 years the US tax system went through striking changes that considerably reduced the progressivity of the system. This resulted in a dramatic reduction of effective tax rates on top income groups. This paper investigates the macroeconomic repercussions of this change in tax policy, particularly for the distributions of income, wealth, consumption and welfare.
    Date: 2014
  2. By: Moscarola, Flavia Coda (University of Turin ); Colombino, Ugo (University of Turin ); Figari, Francesco (University of Insubria ); Locatelli, Marilena (University of Turin )
    Abstract: A tax shifting from labour income to housing taxation is generally advocated on efficiency grounds. However, most of the empirical literature focuses on the distributional implications of property tax reforms without paying much attention to potential consequences on the labour market. The aim of this paper is to fill this gap by investigating the effects of a tax shifting from labour income to property, guaranteeing revenue neutrality, and to assess the consequences of labour market equilibrium, both on occupation rates and income distribution. We propose to consider a hypothetical tax reform in Italy which uses the revenue of the tax on house property (actually implemented in 2012) for increasing tax credits on low incomes and making them refundable. In order to evaluate the reform we have developed a structural model of household labour supply which takes into account the labour market equilibrium conditions. Overall, the simulated policy provides a more effective income support and better incentives to work for low wage households and determines an improvement in inequality indexes.
    Keywords: labour supply, tax shifting, personal tax on labour income, property tax, labour market equilibrium, microsimulation
    JEL: C35 C53 D31 J22 H31
    Date: 2015–02
  3. By: Renato Gomes ; Jean-Marie Lozachmeur ; Alessandro Pavan
    Abstract: We study nonlinear income taxation in a Roy model in which agents’ productivity is sector-specific. We show that when income taxes can be sector-specific, the Diamond-Mirrlees theorem (according to which the second-best displays production efficiency) fails: social welfare (be it Rawlsian or Weighed Utilitarian) can be increased by assigning some agents to their least productive sector. By sacrificing production efficiency, the planner incurs second-order losses in total output, but obtains a first-order reduction in the informational costs of redistribution. The same result obtains when the government is constrained to a uniform income tax schedule, as long as sales taxes can be made sector-specific. In this latter case, our result also implies failure of the Atkinson-Stiglitz theorem (according to which, when preferences over consumption and leisure are separable, as they are in our economy, the second-best can be implemented with zero sales taxes).
    Keywords: income taxation, occupational choice, sales taxes, sector-specific taxation, production efficiency JEL Classification: C72, D62
    Date: 2014–07–01
  4. By: Gopalakrishnan, Pawan ; Saha, Anuradha
    Abstract: We build a two sector (agriculture and manufacturing) heterogenous agent model to analyze the effects of a food subsidy program on output and prices. The government may finance this subsidy by levying a distortionary income tax or a tax on manufacturing consumption. We find that in the long run the program increases the food output but lowers the manufacturing output, in both methods of its financing. While the price of food crop relative to the price of manufacturing good falls with subsidies in the income tax regime, the effect is opposite in the consumption tax regime. We also find that the food subsidy program may have long-run welfare gains for the two agents, but only for a certain range of subsidies. However, our simulations suggest that there is no subsidies which benefit both agents at the same time. Further, financing this program using an indirect consumption tax is a Pareto improvement over the direct income tax regime.
    Keywords: Endogenous Growth, Fiscal Policy, Food Security, Welfare
    JEL: E2 E62 H29 O1 O11
    Date: 2015–02–10
  5. By: Falch, Torberg ; Fischer, Justina A.V.
    Abstract: Student achievement has been identified as an important contributor to economic growth. This paper investigates the relationship between redistributive government activities and investment in human capital measured by student performance in international comparative tests in Mathematics and Science during the period 1980 to 2003. In fixed effects panel models, government consumption, government social expenditures, and the progressivity of the income tax system have negative effects on student achievement. These results are robust to a variety of model specifications, such as conditioning on educational expenditures, and alternative measures of student performance from the World Bank. Our estimates indicate that increased government size by 10 percent reduces student achievement by 0.1 standard deviations.
    Keywords: Student achievement; welfare state; government size; tax system; panel data; international tests; PISA
    JEL: C33 H2 I2
    Date: 2014–07–11
  6. By: Christoph Basten (KOF Swiss Economic Institute, ETH Zurich, Switzerland ); Maximilian von Ehrlich (University of Berne, Switzerland ); Andrea Lassmann (KOF Swiss Economic Institute, ETH Zurich, Switzerland )
    Abstract: This paper provides novel evidence on the role of income taxes for residential rents and spatial sorting. Drawing on comprehensive apartment-level data, we identify the effects of tax differentials across municipal boundaries in Switzerland. The boundary discontinuity design (BDD) corrects for unobservable location characteristics such as environmental amenities or the access to public goods and thereby reduces the estimated response of housing prices by one half compared to conventional estimates: we identify an income tax elasticity of rents of about 0.26. We complement this approach with census data on local sociodemographic characteristics and show that about one third of this effect can be traced back to a sorting of high-income households into low-tax municipalities. These findings are robust to a matching approach (MBDD) which compares identical residences on opposite sides of the boundary and a number of further sensitivity checks.
    Keywords: Local taxation, income taxation, housing prices, income sorting, boundary discontinuity design, spatial differencing
    JEL: H71 H24 R21 R38 C14
    Date: 2014–07
  7. By: Diego d'Andria (Graduate College "Economics of Innovative Change", Friedrich Schiller University and Max Planck Institute of Economics, Jena ); Ivan Savin (Graduate College "Economics of Innovative Change", Friedrich Schiller University and Max Planck Institute of Economics, Jena )
    Abstract: In the past decades the role of profit sharing schemes (PSS) as a way to foster innovation in a principal-agent context, and more generally of innovation in economic growth, have been widely acknowledged and studied. However, surprisingly little has been done to analyze the interactions between tax policy, PSS and innovative activity, not least because of severe data limitations. In this study we propose an agent-based model to explore the effects of two distinct tax policies on innovation in a pure knowledge economy: a 'patent box' incentive and a tax incentive on compensation earned by agents as PSS. A distinct feature of this paper is that in contrast to the conventional assumption that firms (principals) decide on whether to innovate or not, we propose that this decision is actually taken by their employees (agents). We compare the two tax incentives under several distinct specifications and find that the tax incentive on PSS is more efficient than a 'patent box' incentive when the role of capital investments in R&D is negligible. With R&D investments in the form of a capacity constraint, both tax incentives are found to play a role in fostering innovation. In addition we find important effects on the incentives' rela- tive efficacy due to labor mobility and due to the ability of firms to benefit from knowledge spillovers.
    Keywords: agent-based model, innovation, knowledge economy, profit sharing schemes, tax incentives for R&D
    JEL: H2 O3 J33
    Date: 2015–02–20
  8. By: John Hills
    Abstract: Presenting his 2010 spending review, George Osborne, the Chancellor, insisted that "those with the broadest shoulders should bear the greatest burden". How did the Coalition's benefit and direct tax policies affect the distribution of incomes, inequality and poverty?
    Keywords: social policy, benefits, distributions of economic outcomes, income poverty, tax and benefit policy, wealth inequality
    Date: 2015–01
  9. By: Joan Costa-i-Font ; Filipe De-Albuquerque ; Hristos Doucouliagos
    Abstract: A growing literature documents the existence of strategic political reactions to public expenditure in one jurisdiction on either neighboring or reference jurisdictions. The latter might give raise to downward expenditure spiral, or “race to the bottom”. However, in ascertaining the empirical triggers of such a process evidence is suggestive of markedly heterogeneous findings. Most of such heterogeneity can be traced back to study design and institutional differences. This paper contributes to the literature by applying meta-regression analysis to quantify the size and the direction of strategic inter-jurisdictional expenditure interactions controlling for study and institutional characteristics. We find several robust results beyond confirming that jurisdictions do engage in strategic expenditure interactions; namely that (i) interactions are weakening over time; (ii) strategic interactions are stronger among municipalities than among intermediate levels of government; and (iii) strategic interactions appear to emerge from tax competition rather than yardstick competition, with capital controls and fiscal decentralization shaping the magnitude of fiscal interactions. Hence, we conclude political decentralization structures that draw upon the political agency (yardstick competition) are not necessarily engendering a ‘race to the bottom’.
    Keywords: inter-jurisdictional competition; yardstick competition; meta-regression; expenditure competition
    JEL: H10 H50
    Date: 2015–02
  10. By: Luis Huesca (Centro de Investigación en Alimentación y Desarrollo ); Arturo Robles Valencia (Centro de Investigación en Alimentación y Desarrollo ); Abdelkrim Araar (Université Laval, Québec, Canada )
    Abstract: We measure the general redistributive effect in the Mexican fiscal system and its northern border with two decomposition approaches. The novelty of this application lies in the use of non-parametric techniques and the fact that we did not assume any functional relationship among the variables in analysis. Our paper contributes with an assessment of the new 2014 fiscal reform according to the Value Added Tax (VAT) and its effects on the households. A tax-benefit system with relative progressivity but high HI effect is found as well as an increase on tax revenues up to 4 percent of GDP from VAT in the border as well. Our analytical method to decompose the total progressivity measured by the contributions of different tax sources from VAT, allow us to conclude which sort of products should or should not be taxed with the general rate.
    Keywords: Value added tax; redistribution; vertical equity; horizontal inequity; non-parametric analysis
    JEL: D63 H22 H23 I32 C14
    Date: 2015–01–01
  11. By: Cremer, Helmuth (Toulouse School of Economics ); Lozachmeur, Jean-Marie (Toulouse School of Economics ); Maldonado, Dario (Universidad de los Andes ); Roeder, Kerstin (University of Munich )
    Abstract: This paper studies the design of couples' income taxation when consumption and labor supply decisions within the couple are made by maximizing a weighted sum of the spouses' utilities; bargaining weights are given but specific to each couple. Information structure and labor supply decisions follow the Mirrleesian tradition. However, while the household's total consumption is publicly observable, the consumption levels of the individual spouses are not observable. With a utilitarian social welfare function we show that the expression for a spouses' marginal income tax rate includes a "Pigouvian" (paternalistic) and an incentive term. The Pigouvian term favors a marginal subsidy (tax) for the high-weight (low-weight) spouse, whose labor supply otherwise tends to be too low (high). The sign and the magnitude of the incentive term depend on the weight structure across couples. In some cases both terms have the same sign and imply a positive marginal tax for the low-weight spouse (who may be female) and a negative one for the high-weight spouse (possibly the male). This is at odds with the traditional Boskin and Sheshinski results. Our conclusions can easily be generalized to more egalitarian welfare functions. Finally, we present numerical simulations based on a calibrated specification of our model. The calculations confirm that the male spouse may well have the lower (and possibly even negative) marginal tax rate.
    Keywords: couples' income taxation, household bargaining, optimal income taxation, household labor supply
    JEL: H21 H31 D10
    Date: 2015–02
  12. By: Francesco Andreoli (LISER, Luxembourg ); Giorgia Casalone (University of the Eastern Piedmont, Italy ); Daniela Sonedda (University of the Eastern Piedmont, Italy )
    Abstract: We estimate structural quantile treatment effects to analyze the relationship between household income and sorting into private or public education, using Italian data. Public education provision is redistributive when rich families, who contribute to its financing, find it optimal to sort out of the public system to buy the educational services in the private market. This may occur when the education quality is lower in the public compared to the private sector, meaning that households with higher income capacity face lower opportunity costs from sorting out of the public system. We exploit heterogeneity in expected tax deductions to exogenously manipulate the distribution of net of taxes income, equalized by family needs, and explore the consequences of this manipulation on various quantiles of the distribution of the amount of the educational transfers in-kind accruing to the households, valuing public education. We find that an increase in income reduces the amount of educational transfers in-kind (i) more for higher quantiles of the educational transfers in-kind, indicating that households with higher preferences for quality sort out of the public education system; (ii) more for lower quantiles of the households' income capacity, indicating that richer households receive lower transfers for a given preference quality.
    Keywords: Transfer in kind, public education provision, income distribution, structural quantile treatment effects.
    JEL: H40 D30 I20
    Date: 2015–01
  13. By: Razin, Assaf ; Sadka, Efraim ; Suwankiri, Benjarong
    Abstract: We develop a dynamic political-economic theory of welfare state and immigration policies, featuring three distinct voting groups: skilled workers, unskilled workers, and old retirees. The essence of inter - and intra-generational redistribution of a typical welfare system is captured with a proportional tax on labor income to finance a transfer in a balanced-budget manner. We provide an analytical characterization of political-economic equilibrium policy rules consisting of the tax rate, the skill composition of migrants, and the total number of migrants. When none of these groups enjoy a majority (50 percent of the voters or more), political coalitions will form. With overlapping generations and policy-determined influx of immigrants, the formation of the political coalitions changes over time. These future changes are taken into account when policies are shaped. Naturally, a lower rate of population growth (that is, an aging population) increases the political clout of the old (the left group). But it also increases the burden on the young (particularly, the skilled).
    Keywords: center; dynamics of left and right coalitions; intra- and inter-generational transfers
    JEL: E10 F15 H10
    Date: 2015–02
  14. By: Hansen, Marianne Frank (Danish Rational Economic Agents Model (DREAM) ); Schultz-Nielsen, Marie Louise (Rockwool Foundation Research Unit ); Tranæs, Torben (Rockwool Foundation Research Unit )
    Abstract: All over Europe, ageing populations threaten nations' financial sustainability. In this paper we examine the potential of immigration to strengthen financial sustainability. We look at a particularly challenging case, namely that of Denmark, which has extensive tax-financed welfare programmes that provide a high social safety net. The analysis is based on a forecast for the entire Danish economy made using a dynamic computable general equilibrium model with overlapping generations. Net contributions to the public purse are presented both as cross-sectional figures for a long time horizon and as average individual life-cycle contributions. The main conclusion is that immigrants from richer countries have a positive fiscal impact, while immigrants from poorer countries have a large negative one. The negative effect is caused by both a weak labour market performance and early retirement in combination with the universal Danish welfare schemes.
    Keywords: immigration, sustainable fiscal policy, welfare benefits
    JEL: F22 E62 J61
    Date: 2015–02
  15. By: Stephen P Jenkins
    Abstract: This paper describes the UK income distribution and how it has evolved over the last 50 years. It also includes some comparisons with the income distributions of other rich countries. Multiple perspectives on the distribution are provided: there is evidence about real income levels and inequality, and the prevalence of affluence and of poverty.
    Keywords: Inequality, poverty, affluence, income distribution, United Kingdom
    JEL: D31 I32
    Date: 2015–02
  16. By: Lebon, Isabelle (University of Caen ); Rebiere, Therese (CNAM, Paris )
    Abstract: This paper studies optimal taxation schemes for education in a search-matching model where the labor market is divided between a high-skill and a low-skill sector. Two public policy targets – maximizing the global employment level and optimizing the social surplus – are studied according to three different public taxation strategies. We calibrate our model using evidence from fourteen European countries, and compare our results with the target from the Europe 2020 Agenda for achievement in higher education. We show that, with current labor market characteristics, the target set by governments seems compatible with the social surplus maximization objective in some countries, while being too high for other countries. For all countries, maximizing employment would imply higher educational spending than that required for the social surplus to reach its maximum.
    Keywords: educational policy, job search, matching model, optimal taxation
    JEL: H21 H52 J21 J64
    Date: 2015–02
  17. By: Rodolfo Campos ; Iliana Reggio
    Abstract: We study the optimal provision of unemployment insurance (UI) in a framework that distinguishes between consumption and expenditure. We derive a "sufficient statistics" formula for optimal UI that is expressed terms of observable variables and can therefore be used in applied work. Recent research has shown that unemployed households pay less per unit of consumption than employed households. This finding has two counteracting effects on the optimal level of UI. On the one hand, consumption smoothing benefits identified from expenditure data overestimate the true marginal benefits of UI. On the other hand, UI benefits become more valuable because they buy more consumption when unemployed. In an optimal design, which effect dominates depends on the curvature of the utility function. We show that for relative risk aversion larger than one the first effect dominates, leading to lower levels of optimal UI.
    Keywords: consumption , expenditure , consumption-smoothing , social insurance , unemployment insurance
    JEL: D11 J64 J65 J68
    Date: 2015–02
  18. By: Ruist, Joakim (Department of Economics, School of Business, Economics and Law, Göteborg University )
    Abstract: This study estimates the fiscal cost of refugee immigration. This is done by calculating the total value of economic resources that are redistributed through the public sector in Sweden in 2007 to the population of immigrants who once arrived in the country as refugees or their family members. The total redistribution corresponds to 1.0% of Swedish GDP in the same year. Four-fifths of it is due to lower public per-capita revenues from refugees compared with the total population, and one-fifth is due to higher per-capita public costs associated with refugees.<p>
    Keywords: immigration; public finances; refugees
    JEL: H20 H50 J19 J61
    Date: 2015–02–23
  19. By: Dirk Foremny (Universidad de Barcelona & IEB ); Ronny Freier (German Institute for Economic Research (DIW Berlin) & Free University Berlin ); Marc-Daniel Moessinger (Centre for European Economic Research (ZEW Mannheim) ); Mustafa Yeter (Centre for European Economic Research (ZEW Mannheim) )
    Abstract: We advance the literature on political budget cycles by testing separately for cycles in expenditures for elections in the legislative and the executive. Using municipal data, we can separately identify these cycles and account for general year effects. For the executive branch, we show that it is important whether the incumbent re-runs. To account for the potential endogeneity associated with this decision, we apply a unique instrumental variables approach based on age and pension eligibility rules. We find sizable and significant effects in expenditures before council elections and before joint elections when the incumbent re-runs.
    Keywords: Election cycles, municipal expenditures, council and mayor elections, instrumental variables approach
    JEL: H11 H71 H72 H74
    Date: 2015
  20. By: Armagan Tuna Aktuna-Gunes (Centre d'Economie de la Sorbonne - Paris School of Economics )
    Abstract: In this article, we propose to calculate the size of the population living in poverty, measured through uni- and multidimensional poverty indices, and the Gini coefficient using extended full (time plus money and informal earnings) incomes, from cross-sectional data covering 2003-2006 in Turkey. Thus monetary incomes are corrected by adding the earnings gathered from informal activities and the monetary values of time spent in domestic activities into declared incomes, producing an error-free estimate of the size of the population living in poverty and the Gini ratio overall. To show the effect informal activities with the domestic ones have on poverty, changes in the joint probability of being in informal activity while being considered poor is measured by means of a bivariate probit model using extended (money plus informal earnings) income and extended full incomes.
    Keywords: Informal earnings, domestic activities, poverty, Gini coefficient.
    JEL: E26 D1 I32 D63
    Date: 2015–02
  21. By: Wellschmied, Felix (Universidad Carlos III de Madrid )
    Abstract: This paper quantitatively determines the asset limit in income support programs which minimizes consumption volatility in a lifecycle model with incomplete markets and idiosyncratic earnings risk. An asset limit allows allocating transfers to those households with the highest utility gains from extra consumption. Moreover, it serves as substitute for history and age dependent taxation. However, a low limit provides incentives for high school dropouts to accumulate almost no wealth. Consequently, they miss self-insurance and suffer from high consumption volatility. For an unborn, these effects are optimally traded-off with an asset limit of $145000.
    Keywords: means-tested programs, public insurance, incomplete markets
    JEL: D91 I38 J26
    Date: 2015–02
  22. By: Monras, Joan (Sciences Po, Paris )
    Abstract: Previous literature shows that internal migration rates are strongly procyclical. This would seem to imply that geographic relocation does not help mitigate negative local economic shocks during recessions. This paper shows that this is not the case. I document that net in-migration rates decreased in areas more affected by the Great Recession. Using various IV strategies that rely on the importance of the construction sector and the indebtedness of households before the crisis, I conclude that internal migration might help to alleviate up to one third of the effects of the crisis on wages in the most affected locations. This is due to a disproportionate decrease in in-migration into those locations rather than an increase in out-migration. More generally, I show that differences in population growth rates across locations are mainly explained by differences in in-migration rates rather than in out-migration rates. I introduce a model to guide the empirical analysis and to quantify the spill-over effects caused by internal migration.
    Keywords: internal migration, local labor demand shocks
    JEL: J61 J20 J30 F22 J43 R23 R58
    Date: 2015–02
  23. By: Dan Cao (Georgetown University ); Jinhui Bai (Georgetown University )
    Abstract: We propose a model that explains the relationship between wealth distribution and asset prices over the business cycles. The model features an economy with a continuum of agents and with both idiosyncratic and aggregate shock a la Krusell and Smith (1998). However, we allow agents to trade in a long-lived asset in addition to in-contingent bonds. We develop a numerical method to calculate wealth-recursive equilibrium in the economy and apply the method to examine quantitatively the relationship between wealth distribution and asset prices in the U.S. economy.
    Date: 2014
  24. By: Arthur Charpentier (Université du Québec à Montréal CREM & GERAD ); Emmanuel Flachaire (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS Institut Universitaire de France )
    Abstract: Standard kernel density estimation methods are very often used in practice to estimate density function. It works well in numerous cases. However, it is known not to work so well with skewed, multimodal and heavy-tailed distributions. Such features are usual with income distributions, defined over the positive support. In this paper, we show that a preliminary logarithmic transformation of the data, combined with standard kernel density estimation methods, can provide a much better fit of the density estimation.
    Keywords: nonparametric density estimation, heavy-tail, income distribution, data transformation, lognormal kernel
    JEL: C15
    Date: 2015–02

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