Social incidence and economic costs of carbon limits

This paper discusses both distributional and allocational effects of limiting carbon dioxide emissions in a small and open economy. It starts from the assumption that Switzerland attempts to stabilize its greenhouse gas emissions over the next 25 years, and evaluates costs and benefits of the respective reduction program. From a methodological viewpoint, this paper illustrates, how a computable general equilibrium approach can be adopted for identifying economic effects of cutting greenhouse gas emissions on the national level. From a political economy point of view it considers the social incidence of a greenhouse policy. It shows in particular that public acceptance can be increased and economic costs of greenhouse policies can be reduced, if carbon taxes are accompanied by revenue redistribution.     

The distribution of Seigniorage in The Netherlands

Summary This paper investigates the revenue from money and its distribution between the government and the central bank. An accounting framework is developed taking explicit account of stock and flow aspects of monetary revenue. Application of this framework to data for The Netherlands shows that although the overall revenue from money in the period 1949–1989 was sizeable, the central government did not really benefit from its monetary monopoly.Helpful comments by M.M.G. Fase and two anonymous referees are gratefully acknowledged.     

Solvency and sustainability of fiscal policies in the EU

Summary This paper focuses on the sustainability and solvency issues of the public sector. Tests for sustainability heavily rely on the time-series properties of the debt-to-GDP ratio, whereas solvency test focus on the deficit inclusive of interest payments. Sustainability and solvency tests are applied first on 8 ERM countries during the period 1970–1994. Subsequently, we concentrate on historical evidence (from 1870 onwards) for the Belgian central government. This long-term view allows for a more accurate time-series analysis. On the one hand, we find historical support for the hypothesis that high and persistent deficits for some periods can be consistent with the present-value budget constraint (solvency), provided that policies are changed eventually. On the other hand, the much stronger requirement of sustainability is not fulfilled since we do not find a tendency of the debt ratio to return to a constant long-run equilibrium level.Previous versions of this paper were written while F. Vanhorebeek was a research assistant at the Department of Economics, Catholic University of Leuven. We are grateful to W. Asma; G. de Bruyne, N. Demeester and two anonymous referees for their comments regarding the paper's methodology. We have also benefited from useful conversations with E. Buyst and P. Clement on the subject of this paper, as well as from their help in obtaining historical data. Remaining errors are ours. The opinions expressed here are solely those of the authors and should not be attributed to any other person affiliated with the Planning Bureau or the University.     

Issues in Assessing the Effect of Interindustry R&D Spillovers

This paper aims to clarify three issues concerning the weighting methodol ogy generally used to evaluate interindustry R&D spillovers. These issues concern the likely nature of the spillovers estimated through different types of supporting matrices; the similarity between input–output (IO), technology flows and technological proximity matrices; and the relevance of the assumption that a single matrix can be used for different countries. Data analyses of weighting components show that technology flows matrices are in an intermediate position between IO matrices and technological proximity matrices, but closer to the former. The various IO matrices, as well as the three technological proximity matrices, are very similar to each other. The panel data estimates of the effect of different types of interindustry R&D spillovers on industrial productivity growth in the G7 countries reject the hypotheses that a technology flows matrix can be approximated by an IO matrix and that a single IO matrix can be usedfor different countries. By transitivity, the procedure that comprises using a single technology flow for several countries is not reliable. The international comparison shows that each country benefits from different types of R&D externality. In Japan and, to a lesser extent, in the US, the rate of return to direct R&D is very high and is likely to compensate for relatively weak interindustry R&D spillover effects. In the five other industrialized countries, the reverse observation is true: strong social rates of return to R&D counterbal ance the poor performances of direct R&D.     

The natural rate moves! A review essay of Edmund Phelps' structural slumps

Summary This review essay of Edmund Phelps' Structural Slumps.The Modern Equilibrium Theory of Unemployment, Interest and Assets argues thatStructural Slumps is an important book, which enriches neoclassical economics and has substantive things to say about the persistence of high unemployment rates in many industrial countries. However, the book does not substantiate Phelps' own claims that the structural approach represents a new paradigm in economic theory and that the new paradigm is the only convincing explanation for persistently high levels of unemployment. With respect to the first claim it is argued that the structuralist approach is not fundamentally different from neo-classical macroeconomics. With respect to the second claim it is illustrated that the empirical evidence is inconclusive as far as the alleged superiority of the structuralist approach is concerned.We would like to thank Lex Hoogduin, Simon Kuipers and an anonymous referee for useful comments. Of course, the usual disclaimer applies.     

The purpose and effectiveness of technology transfer to small businesses by government-sponsored innovation centres

The Dutch government instituted regional innovation centres (ICs) for the stimulationof technology transfer to small business. In the context of an evaluation of these ICs, technology transfer is analysed on the basis of the adoption process according to Rogers. Attention is given to problems of bounded rationality, in particular tacit knowledge that arise especially among small business. Rogers criteria for adpoption are extended and supplemented with criteria for product innovation. The purpose of ICs is reconstructed as the guidance of firms in the adoption process, on the basis of the criteria. The analysis develops into a market segmentation of firms as a basis for a marketing plan for ICs. The segmentation corresponds with the taxonomy of firms in the context of diffusion that was developed by Pavitt on the basis of an innovation data base. Effectiveness of ICs is defined as the setting of proper priorities with respect to market segmentation, and a guidance of firms in the adoption process which enters and leaves the adoption process neither too late nor too early with approaches adopted to the market segments.     

Behavioral dimensions of channels of distribution: Review and synthesis

This paper reviews and synthesizes the past research in the area of behavioral dimensions of channels of distribution. The authors explore the focal points of works on bargaining, conflict, cooperation, power, performance, member roles, member satisfaction and political economy. Suggestions for future research are supplied.