Rationalizing Australian Taxation Revisited*

This paper reviews the author's (1971) tax rationalization proposal to examine whether a tax simplification scheme eliminating minor transaction taxes and reducing heavy reliance on personal income tax by introducing a general consumption tax continues to have merit for Australian tax reform. The first part of the paper points to increases in avoidance and evasion as a major change perceivable in Australian taxation between the 1960s and the 1980s and indicates other important changes that have occurred. Section II presents an equity and simplicity case for general indirect consumption taxation supplemented by personal income and wealth taxes. Section III discusses the inter-governmental financial relations implications of the proposed rationalization. The paper concludes that in the light of events in 1983 such rationalization proposals suitably modified continue to have merit.     

Intergenerational Earnings Mobility Revisited: Estimates Based on Lifetime Earnings*

Using Norwegian intergenerational data, which include a substantial part of the life‐cycle earnings for children and almost the entire life‐cycle earnings for their fathers, we present new estimates of intergenerational mobility. Extending the length of fathers’ earnings window from 5 to 25 years increases estimated elasticities. Increasing the age at which fathers’ earnings are observed has the opposite effect. Biases in the estimated elasticities are related to both transitory earnings variation and life‐cycle measurement error; the former appear to be more important than the latter. Estimation bias stemming from persistence in transitory innovations plays only a minor role. Our findings indicate that intergenerational earnings mobility in Norway might have been strongly overstated in many earlier studies with shorter earnings histories. Some of our new estimates are twice as large as earlier estimates.     

The Credibility Problem Revisited: Thirty Years on from Kydland and Prescott*

Macroeconomics research has changed profoundly since the Kydland–Prescott seminal paper. In order to address the Lucas Critique, modeling is now based on micro‐foundations treating agents as rational utility optimizers. Bayesian estimation has produced models which are more data‐consistent than those based simply on calibration. With micro‐foundations and new linear‐quadratic techniques, normative policy based on welfare analysis is now possible. In the open economy, policy involves a “game” with policymakers and private institutions or private individuals as players. This paper attempts to reassess the Kydland–Prescott contribution in the light of these developments.     

Issue Linking in Trade Negotiations: Ricardo Revisited or No Pain No Gain*

There has been much discussion about what issues should be included in international “trade” negotiations. Different countries, firms, and activist groups have quite different views regarding which items should (or should not) be negotiated together. Proposals run the gamut from no linking to linking trade with investment, the environment, labor, and human rights codes. This paper provides a formal framework for analyzing this question. It employs a two‐country, two‐issue bargaining model and contrasts outcomes when issues are negotiated separately and when they are linked in some form. A key concept is “comparative interest,” analogous to Ricardian comparative advantage. We provide general results and note, in particular, where a country can benefit by agreeing to include an agenda item for which, when viewed by itself, the country does not receive a positive payoff. We also provide an application of our analysis to negotiations on trade liberalization and environmental protection.     

The Balassa–Samuelson Hypothesis in the Asia‐Pacific Region Revisited*

In a study of nine Asia‐Pacific countries' real exchange rates, Chinn (2000) finds some evidence in support of the Balassa (1964) and Samuelson (1964) hypothesis. His findings, however, are based on the application of a model containing several potentially restrictive simplifying assumptions to a dataset of limited span. Consequently, we look to assess the effect on Chinn's findings of considerably increasing the sample size and relaxing these assumptions. We find a comparable level of evidence for the Balassa–Samuelson hypothesis when applying Chinn's model to the larger sample, but obtain significantly greater support when a less restrictive approach is adopted.     

Learning‐by‐Exporting Revisited: The Role of Intensity and Persistence*

Two non‐mutually exclusive hypotheses can explain the empirically established export premium: self‐selection of more productive firms into export markets and learning‐by‐exporting. This paper focuses on how the temporal dimension of firms' exporting activities and the intensity of exports influence the scope of learning effects. Using a panel of Swedish firms and dynamic generalized method of moments estimation, we find a learning effect among persistent exporters with high export intensity, but not among temporary exporters or persistent exporters with low export intensity. For small firms, exports boost productivity among persistent exporters with both high and low export intensity, but the effect is stronger for persistent export‐intensive small firms.     

Convergence Revisited

The recent literature on convergence has departed fromthe earlier literature by focusing on the shape of the productionfunction and the rate at which an economy converges to its ownsteady state. This article uses advances from the recent literatureto look back at the question that originally motivated the convergenceliterature: what will the distribution of per capita income looklike in the future? Several results are highlighted by the analysis,including the suggestion that there is little reason to expectthe United States to maintain its position as world leader interms of output per worker.     

重访发展政治学

本文回顾了四十年来发展政治学的成果。发展政治学在早期曾试图建立一个研究发展中国家的政治和政治变化的理论框架。但后来知识界对现代化理论和结构功能主义提出了挑战,从而削弱了这一理想。而且,现实世界中事件的发展,证明发展政治学中目的论的视角是有问题的。不过,后来,发展政治学在政治制度、民主的稳定和崩溃、国家结构、公民社会和政治发展的不平衡等方面的研究上取得了长足的进展。本文认为,当前,繁多的证据表明,政治发展和政治衰败过程是多种多样的。因此,发展政治学应当避免倒退到一种新的现代化理论之中。相反,该领域应当专注在国家改革、民主统治、代议政治、责任政府、公民社会的组织等这些论题上。关注这些广泛而活跃的问题,发展政治学会对比较政治学作出重要的理论贡献。     

Income Shares Revisited

A number of recent studies claim that when properly computed, factor income shares across countries at different levels of development are essentially uniform. This note evaluates the methodology behind such findings and offers estimates using newly available data. The results for a group of 55 developed, developing, and transition economies for the period 1990–2008 lead us to reject the hypothesis of factor share convergence.     

重访泰山

20年前登过泰山。记得那是我刚爬过黄山不久。黄山之险、奇、陡、峭,在我脑中尚未消失。“黄山归来不看山”的谚语,使我对泰山首先就有一股征服的勇气。加上当时确实年轻,才三十七八岁．所以,当所有同行者10多人皆乘缆车上山时．惟我一人奋勇登山。仗看一股雄气,从山下“红门”到“中天门”     

Reduced Form Auctions Revisited

This note uses the Theorem of the Alternative to prove new results on the implementability of general, asymmetric auctions, and to provide simpler proofs of known results for symmetric auctions. The tradeoff is that type spaces are taken to be finite.     

Rational Strategic Choice Revisited

This note corrects an error in Bernheim's (1986) axiomatic characterization of solution concepts for strategic games. Unlike the correction offered by De Wolf and Forges (1998), the approach taken here preserves Bernheim's central results concerning the interrelationships between solution concepts.     

Infant Industry Protection Revisited

In 1791, Alexander Hamilton suggested that assuring protection to domestic entrants Could pre-empt entry-degterrence by foreign firms. This paper reformulates his Argument in game-theoretic terms with asymmetric cost information, imposing the Requirement that both the foreign firm's threat and the home governments's promise of Protection should be credible. It derives a simple optimal tariff formula that depends Only on the expectation of foreign costs. It then shows that this tariff can lead to Welfare-decreasing entry, but only if thee foreign is relatively inefficient. However, If the formula is applied with dynamic consistency, and is rationally anticipated by both foreign and domestic firms, it prevents foreign entry-deterrence and improves deomestic welfare. [F13, 019]     

新贸易理论：证据再反思

产业内贸易常被作为支持“新贸易理论”的一个关键因素。然而本文从理论和实证两个方面对这一观察提出了若干质疑。建立在68个国家数据基础上的静态和动态计量模型结果显示，经济规模、消费者偏好、地理位置、贸易不均衡以及贸易环境（国家的经济开放程度）等因素，在短期和长期都对产业内贸易产生影响。这些发现促使“新贸易理论”重新去审视支持它的“证据”。     

Uncovered Interest Parity Revisited

A standard empirical finding in international finance is that countries with high nominal interest rates experience appreciations of their currencies, in contrast to predictions based on uncovered interest parity (UIP). However, tests of UIP have almost exclusively relied on data on short-term interest rates. In this paper, UIP is tested on long-term government bond yields. Since the presence of coupon payments induces a measurement error between the observed data and true returns, several different proxies for the latter are constructed. Furthermore, instrumental variable techniques are used. In contrast to thetypical finding, the results are rather favorable to UIP.     

Licensing Under Bertrand Competition Revisited

This note indicates that the derivation of the royalty contract for licensing in Wang and Yang (Australian Economic Papers, 39 (1999) 106–119) is not correct. As a consequence, the profits of the innovator in the case of royalty licensing are underestimated.     

Household Electricity Demand, Revisited

Recent efforts to restructure electricity markets have renewed interest in assessing how consumers respond to price changes. This paper develops a model for evaluating the effects of alternative tariff designs on electricity use. The model concurrently addresses several interrelated difficulties posed by nonlinear pricing, heterogeneity in consumer price sensitivity, and consumption aggregation over appliances and time. We estimate the model using extensive data for a representative sample of 1300 California households. The results imply a strikingly skewed distribution of household electricity price elasticities in the population, with a small fraction of households accounting for most aggregate demand response. We then estimate the aggregate and distributional consequences of recent tariff structure changes in California, the consumption effects of which have been the subject of considerable debate.