State Trading and Tariff Rate Quotas: The Case of Korea's Rice Imports

This paper analyzes the effects of trade liberalization of tariff‐rate quotas under import “state trading enterprises” (STEs) in agriculture. An analytical framework is provided to determine the importance of which instrument is binding under competition (the in‐quota or out‐of‐quota tariff or the quota) and under the initial STE equilibrium. It also depends on whether or not the STE controls both the domestic market prices and owns/controls the import quota (and whether it is obligated to fill the quota or not). An empirical example of the rice STE in South Korea has simulations showing that an increase in imports can be achieved through a moderate expansion of the quota or a decrease in the out‐of‐quota tariff to the level where it becomes binding. However, a significant level of quota expansion induces the STE to switch to the autarky solution and social welfare declines.     

Tax evasion and labor markets

Concern with revenue losses, inequities, and inefficiency that may result from tax evasion has produced a number of formal analyses of taxpayer dishonesty. Most of this work has concentrated on the behavior of individual evaders and has ignored the interaction between evasion and labor market equilibrium. To remedy this, our analysis uses a model with two labor markets — which differ in the potential for evasion — to examine how changes in various tax parameters affect evasion and labor market equilibrium. We also simulate the effect of switching from a proportional to a progressive tax system in order to evaluate the well-known claim that progressivity encourages evasion.     

Turkey and the EU: Politics and Economics of Accession

This paper discusses political and economic aspects of Turkishaccession. Under present rules, Turkey would have the greatestnumber of council votes within twenty years, and receive thelargest budget transfer. Free migration may increase the Turkishimmigrant population in Germany from 2 to 3.5 million in thirtyyears. Most of the economic effects will be felt by Turkey,particularly in agriculture. The main obstacles to accessionare not economic, but political. Historical experience stopsTurkey from eliminating the decisive political role of the military,giving Kurds and other minorities cultural rights and upholdingbasic human rights.(JEL F02, F15, F22)     

Labor Market Developments in Albania: An Analytical Overview

Rising unemployment and falling living standards are two of the main problems facing policymakers in economies in transition. The case of Albania is distinctive, because high unemployment has been associated with a very large private sector and by far the greatest scale of temporary emigration compared with other transition countries in Europe. The authors develop a model that characterizes the path of unemployment in the presence of temporary emigration. They analyze the emigration decision and the factors that affect registered unemployment emigration, and highlight how changes in flow probabilities between sectors affect the time paths of registered unemployment and emigration.     

Pricing and hedging power options

In this paper we study the pricing and hedging of options whose payoff is a polynomial function of the underlying price at expiration; so-called ‘power options’. Working in the well-known Black and Scholes (1973) framework we derive closed-form formulas for the prices of general power calls and puts. Parabola options are studied as a special case. Power options can be hedged by statically combining ordinary options in such a way that their payoffs form a piecewise linear function which approximates the power option's payoff. Traditional delta hedging may subsequently be used to reduce any residual risk.     

Taxation,time preference,and long term international lending

This paper considers capital movements between two countries with infinite horizons that differ in their rates of time preference. The paper investigates whether there exist regimes of taxing international lending that follow from national optimizing behavior and are consistent with positive consumption in the impatient country in steady state. Three types of taxation regime are considered: (i) taxation by only the borrower country, (ii) taxation by only the lender country, and (iii) taxation by both countries. For all three cases, positive consumption in steady state by the impatient country is possible if the two countries differ sufficiently little in their rates of time preference.     

The Taxation of Banking in an Integrating Europe

The banking sector is subject to explicit taxation and to bank regulation and supervision with quasi-fiscal implications. The assignment of national fiscal policy rights and duties regarding international banks in the EU varies with the fiscal instrument and with whether the international bank owns foreign branches or subsidiaries. Decentralized national policy-making in the EU gives rise to fiscal burdens on banks that differ internationally and with the national origin of banks in the same country. This paper discusses the international aspects of the overall fiscal regime facing banks in the EU and it evaluates some avenues for reform.     

An Extension of the J‐Test to a Spatial Panel Data Framework

Kelejian (Letters in Spatial and Resources Sciences; 1 : 3–11) extended the J‐test procedure to a spatial framework. Although his suggested test was computationally simple and intuitive, it did not use the available information in an efficient manner. Kelejian and Piras (Regional Science and Urban Economics; 41 : 281–292) generalized and modified Kelejian's test to account for all the available information. However, neither Kelejian ( 2008 ) nor Kelejian & Piras ( 2011 ) considered a panel data framework. In this paper we generalize these earlier works to a panel data framework with fixed effects and additional endogenous variables. We give theoretical as well as Monte Carlo results relating to our suggested tests. An empirical application on a crime model for North Carolina is also estimated. Copyright © 2015 John Wiley & Sons, Ltd.