nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2010‒07‒17
three papers chosen by
Karl Petrick
University of the West Indies

  1. Ideas for a new financial architecture. By Snower, Dennis J.
  2. The Shadow Economy in International Comparison: Options for Economic Policy Derived from an OECD Panel Analysis By Ulrich Thießen
  3. CAP Reform Options: A Challenge for Analysis & Synthesis By Jambor, Attila; Harvey, David

  1. By: Snower, Dennis J.
    Date: 2010
  2. By: Ulrich Thießen
    Abstract: Building on new behavioral and institutional theories, using a data set of about 450 variables and augmenting the Sala-i-Martin definition of robustness, we find evidence in support of the hypothesis that the standard causes of the shadow economy (SE), taxes, the administrative burden and labor market regulations, are not per se crucial in determining the size of the SE. There are many other influences with a consistently estimated plausible sign and whose quantitative impact appears to be even larger and more significant than that of the standard causes. Many of the robust influences emanate from relatively new theories such as elements of direct democracy, social interaction effects, moral aspects, and happiness, and from the institutional literature on the relative importance of specific institutions for economic performance. Most of them can well be influenced by governments. Hence, in order to reduce the SE and tax avoidance, a coordinated international strategy of using incentives to work, save, and invest in the official economy, including the behavior of the government, could be more successful than a strategy built on more government control, increased punishment and less freedom. The latter strategy would contradict the new theories and our evidence but appears to have been adopted by some OECD countries. Simulations of the size of the SE demonstrate their sensitivity to required velocity assumptions and show that previous estimates, including those of the so-called Mimic model, appear to be based on the very high end of possible velocity assumptions. Relatively low velocity assumptions can be defended much better and yield macro estimates of the SE consistent with the micro evidence. Finally, for the first time we separate the relatively large "criminal" shadow activity from the "non-criminal" one.
    Keywords: shadow economy, currency and mimic method, policy response
    JEL: C23 E61 H26 O17
    Date: 2010
  3. By: Jambor, Attila; Harvey, David
    Abstract: The European Unionâs Common Agricultural Policy is continually evolving. The growing debate about the future of the EU Budget post 2013  raises major questions about the future of the CAP. A formal Communication on the future of the Common Agriculture Policy (CAP) after 2013 is due to be published by the Commission in the summer/early autumn of this year â in order to launch a full public debate on the issues, and as a part of the Budget Review of 2011. Formal legislative proposals on the post-2013 CAP will then follow in mid-2011 â together with Commission proposals for the post-2013 Financial Perspectives.  It is, therefore, appropriate to review the discussions of further reforms, and also to consider our professional capacity to provide robust analysis of potential futures. The debate on the future CAP is of more than an agricultural interest as it affects, inter alia, the environment, climate change, food quality and security and rural communities and their development. Numerous views have already been expressed on the future of the CAP. However there is very limited synthesis of the options and principles underlying their evolutionary fitness â that is, the extent to which suggestions correspond to the socio-economic environment and political climate upon which the future persistence of the CAP depends. This paper synthesises present views on the future of CAP, and outlines a possible conceptual framework for future research and analyses in the field.
    Keywords: Agricultural and Food Policy,
    Date: 2010–03–29

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