Taxes and stabilization in contemporary macroeconomic models

The role of proportional and procyclic labor income taxes for automatic stabilization with stochastic productivity is analyzed in a contemporary macroeconomic model based on imperfect competition. The importance of short-run nominal wage rigidity for the effectiveness of progressive taxes on labor income for stabilizing output and raising household welfare is examined in a model that yields complete analytical solutions with stochastic output shocks. Increasing the procyclicity of labor income tax rates raises welfare with and without rigid nominal wages in the model economy. With fully flexible prices and wages, a positive covariance between the distortionary tax rate and productivity reduces the volatility of production and employment. This effect disappears under nominal wage rigidity, although progressive taxation can still raise welfare by reducing the distortion caused by a proportional labor tax. With rigid nominal wages and flexible consumer goods prices, payroll taxes levied at rates that rise with output can serve as automatic stabilizers. JEL Code E62 · H20     

劳动力流动与中国农村居民消费结构——基于LAIDS模型的实证研究

使用1992~2011年的时间序列数据,采用线性几乎理想需求系统模型(LAIDS),重点检验了劳动力流动对农村居民消费结构的影响。研究发现,劳动力流动会使衣着、文教娱乐及服务、医疗消费有所增加,会减少食品、居住消费,对家用几乎没有影响。为此,应增加工资性收入,完善劳动力流动政策和供给结构。     

住房、便利设施与异质性劳动力流动——微观机制与福利效应

通过构建住房和便利设施供给内生的空间均衡模型,运用人口调查数据和反事实检验方法,本文考察了住房成本和便利设施水平变动影响异质性劳动力流动的微观机制及其福利效应。研究发现:(1)住房成本随着异质性劳动力向城市集聚而显著上涨,但城市便利设施水平的提高主要得益于高技能劳动力就业规模的扩大,低技能劳动力就业增长的贡献并不显著;(2)住房成本上涨与便利设施水平提高进一步推动了异质性劳动力在城市间的流动与配置,反映在城市体系上,使得城市的规模分布分别呈现出扁平化和向大城市极化的特征;(3)就福利效应而言,住房成本上涨压缩了工资溢价带来的福利水平提升空间,但一定程度上缓解了高、低技能劳动力福利差距的扩大趋势;更高水平的便利设施促进了福利水平的提升,但也加剧了高、低技能劳动力之间的福利不平等状况。城市规模对上述福利效应存在放大机制。     

异质型人力资本溢出、劳动力流动与城乡收入差距

文章引入流动劳动力的异质性结构对传统人力资本溢出理论进行拓展,分析城乡人力资本溢出、劳动力流动对城乡收入差距的影响机理,并基于新古典增长模型和卢卡斯内生增长模型构造收入函数,运用SVAR动态方法,VECM长短期因果检验和预测方差分解对城乡异质型流动人力资本等因素对城乡收入差距变动的影响进行了考察,发现：城乡人力资本流动规模的扩大以及低技能人力资本的流出扩大了收入差距,高技能人力资本的流出缩小了收入差距.由于城乡流动人力资本中低技能型比重偏高,高技能型流动人力资本比重偏低,因此劳动力流动扩大了城乡收入差距.     

城市服务多样性与劳动力流动——基于“美团网”大数据和流动人口微观调查的分析

新时代背景下人们对美好生活的追求倾向愈加凸显,城市服务的多样性福利将成为吸引劳动力和优化人才结构的重要支撑。本文利用“美团网”生活服务分类和2017年中国流动人口动态监测调查(CMDS)数据,研究城市服务多样性对劳动力流动的影响。结果显示,城市服务多样性会显著降低流动人口的迁出意愿,服务品类多样性每增加1%,劳动力迁出的概率平均约降低3.23%;城市服务多样性的影响具有群体差异性,年轻化、高技能群体的敏感度更高,边际效应可达4.62%和4.03%。考虑调节效应和地区异质性的扩展分析进一步发现,城市信息化、市场化水平对服务品类多样性吸引留住人才具有正向放大作用,尤其是在东部地区和500万人口以上大城市中表现尤为突出。本研究为城市人才吸引和劳动力竞争提供了政策启示。     

Inflation Taxation and Welfare with Externalities and Leisure

This paper examines how inflation taxation affects resource allocation and welfare in a neoclassical growth model with leisure, a production externality and money in the utility function. Switching from consumption taxation to inflation taxation to finance government spending reduces real money balances relative to income, but increases consumption, labor, capital, and output. The net welfare effect of this switch depends crucially on the strength of the externality and on the elasticity of intertemporal substitution. While it is always negative without the externality, it is likely to be positive with a strong externality and elastic intertemporal substitution.     

Intersectoral Labor Immobility,Sectoral Comovement,and News Shocks

Sectoral comovement of output and hours worked is a prominent feature of business cycle data. However, most two‐sector neoclassical models fail to generate this sectoral comovement. We construct and estimate a two‐sector neoclassical Dynamic Stochastic General Equilibrium (DGSE) model generating sectoral comovement in response to both anticipated and unanticipated shocks. The key to our model's success is a significant degree of intersectoral labor immobility, which we estimate using data on sectoral hours worked. Furthermore, we demonstrate that imperfect intersectoral labor mobility provides a better explanation for the sectoral comovement than an alternative model emphasizing the role of labor‐supply wealth effects.     

Potential Spatial Labor and Human Capital Mobility in China: Evidence from College Admissions Under the National College Entrance Examination System

Abstract:

Higher education in China plays an important role in promoting labor and human capital mobility. In this paper, I empirically address the issue of regional disparities, college admissions under the National College Entrance Examination (CEE) system, and potential interregional labor and human capital mobility in China. The results show that examinees from western provinces have a strong preference for coastal universities, compared with examinees from central provinces. College admissions in China then seem to have a stronger effect on potential labor and human capital movement from the western to the coastal regions than from the central to the coastal regions.     

Big locational unemployment differences despite high labor mobility

Considerable labor mobility exists across US states, enough that, if migration arbitrages local unemployment, one might expect very low unemployment differences across states. However, cross-state data reveal large unemployment differences. An equilibrium multi-location model with stochastic worker-location match productivity and within-location trading frictions can account for these facts. In the model, some workers move to, or stay in, a location with high unemployment because they are more productive there than elsewhere. According to the model, labor mobility and aggregate unemployment are negatively related. This prediction is in stark contrast to standard sectoral reallocation theory, but consistent with the US data.     

Fixed‐ and Variable‐Rate Mortgages,Business Cycles,and Monetary Policy

This paper studies how the proportion of fixed‐ and variable‐rate mortgages affects business cycles and welfare. I develop and solve a New Keynesian dynamic stochastic general equilibrium model with a housing market and a group of constrained individuals who need housing collateral to obtain loans. The model predicts that with mostly variable‐rate mortgages, an exogenous interest rate shock has larger effects on borrowers than in a fixed‐rate economy. For plausible parameterizations, aggregate differences are muted by wealth effects on labor supply and by the presence of savers. For given monetary policy, a high proportion of fixed‐rate mortgages is welfare enhancing.     

Two targets,two instruments: Monetary and exchange rate policies in emerging market economies

This paper examines the case for using two instruments—the policy interest rate and sterilized foreign exchange market intervention—in emerging market countries seeking to stabilize inflation and output while attenuating disequilibrium currency movements. We estimate policy reaction functions for central banks, documenting that indeed both instruments tend to be deployed. We show that whether discretionary monetary policy or inflation targeting is preferable depends on the volatility of shocks relative to the central bank's time inconsistency problem. The use of FX intervention as a second instrument improves welfare under both regimes, but more so under inflation targeting. Overall, a regime of (two-way) sterilized intervention-cum-inflation targeting can result in better outcomes in the presence of imperfect capital mobility/asset substitutability—yielding similar gains to a discretionary policy while still delivering the inflation target.     

耐用品、投资专有冲击与货币政策福利

本文构建蕴含耐用品与非耐用品的两部门DSGE模型,研究投资专有冲击对货币政策及社会福利的影响。投资专有技术进步改进了投资转化为生产资本的效率,放大边际成本波动,增加了厂商调价动机和价格水平变动。即使耐用品价格完全灵活,最优货币政策也无法同时稳定价格和实际GDP。研究发现:(1)耐用品相对价格缺口波动率的上升虽然增加了实际GDP波动,但能够有效地降低投资专有技术对边际成本的冲击,减少价格变动的福利损失。所以两部门投资专有冲击时,央行倾向于稳定价格水平。与其相反,在单部门投资专有冲击和两部门生产技术冲击时,最优货币政策应降低耐用品相对价格缺口波动,稳定实际GDP。(2)对比三种泰勒规则:钉住非耐用品PPI、钉住加权平均PPI及钉住CPI,福利分析发现钉住非耐用品PPI最优,钉住CPI次之,钉住加权平均PPI的福利损失最大。就损失程度而言,投资专有冲击的福利损失是生产技术冲击的2倍,表明投资专有冲击加剧了最优货币政策在稳定价格与实际GDP间的权衡。     

Group Welfare and the Formation of a Common Labor Market: Some Global Results

Consider a collection of isolated or autarkic regions. The original residents or natives of each region are by assumption a group with a welfare function defined over group members' consumption. Now suppose the regions form a common labor market and a federal government, and one type from each group can freely migrate to other regions. Under what circumstances is this change even potentially beneficial to all groups? We derive a necessary and sufficient condition that depends only on the exogenous parameters of our model. Earlier treatments of these issues focus on relationships among endogenous variables. Our condition underlies those relationships. We also show that there is nothing pathological about the conditions under which federalism must make some or all groups worse off. When it is possible to make all groups better off, we show that the change can be supported by Wildasin's (1991) corrected Nash equilibrium in redistributive transfers.     

From Destination- to Origin-Based Consumption Taxation: A Dynamic CGE Analysis

A switch from the current destination-based value-added taxation to an origin-based consumption tax will not be neutral in a world economy with international capital mobility and overlapping generations. This paper evaluates the macroeconomic and welfare effects of such a multilateral reform in a two-region, intertemporal general equilibrium model. The analysis isolates and quantifies income effects due to changes in generations' tax burdens, factor price repercussions and initial asset price adjustments, as well as efficiency effects that arise from endogenous labor supply and short run savings responses in a numerical simulation exercise.     

Taxing women: A macroeconomic analysis

Based on well-known evidence on labor supply elasticities, several authors have concluded that women should be taxed at lower rates than men. We evaluate the quantitative implications and merits of this proposition. Relative to the current system of taxation, setting a proportional tax rate on married females equal to 4% (8%) increases output and married female labor force participation by about 3.9% (3.4%) and 6.9% (4.0%), respectively. Gender-based taxes improve welfare and are preferred by a majority of households. Nevertheless, welfare gains are higher when the U.S. tax system is replaced by a proportional, gender-neutral income tax.     

Why hasn’t tax competition triggered a race to the bottom? Some quantitative lessons from the EU

The integration of European financial markets in the early 1980s created an environment of near-perfect capital mobility across countries that had harmonized indirect taxes but maintained large differences in factor taxes. The years that followed witnessed several rounds of competition in capital taxes with puzzling results. Instead of the dreaded “race to the bottom” in capital taxes, the UK lowered its capital tax to a rate closer to those of France, Germany and Italy, while capital taxes changed slightly in these countries. The UK increased its labor tax marginally, but the other countries increased theirs sharply. This paper shows that these results are consistent with the quantitative predictions of a dynamic, Neoclassical general equilibrium model of tax competition that incorporates the key international externalities of tax policy operating via relative prices, wealth distribution and fiscal solvency. Tax competition is modeled as a one-shot game over time-invariant capital taxes with dynamic payoffs relative to a status quo calibrated to European data. The calibration is preceded by an empirical analysis that shows that the relationship linking taxes to labor supply and the investment rate in the model are in line with empirical evidence and that domestic taxes seem to respond to foreign taxes. The solutions of the games show that when countries compete over capital taxes adjusting labor taxes to maintain fiscal solvency, there is no race to the bottom and the Nash equilibrium is close to observed taxes. In contrast, if consumption taxes adjust to maintain fiscal solvency, competition over capital taxes triggers a “race to the bottom,” but this outcome entails large welfare gains. Surprisingly, the gains from coordination are small in all of these experiments.     

U.S. consumer bankruptcy choice: The importance of general equilibrium effects

We study the implications of U.S. personal bankruptcy rules for resource allocation and welfare. Our analysis shows that general equilibrium considerations along with bankruptcy chapter choice and production matter crucially for the effects of policy reform. Contrary to previous work, we find that completely eliminating bankruptcy provisions causes significant declines in output and welfare by reducing capital formation and labor input. Furthermore, subjecting Chapter 7 filers to means testing, as suggested by recent legislative proposals, would not improve upon current bankruptcy provisions and, at best, leave aggregate filings, output, and welfare unchanged. However, we do find that an alternative tightening of Chapter 7, in the form of lower asset exemptions, can increase economic efficiency.     

Price Stability in Economies with Habit Persistence

This paper shows that the divine‐coincidence does not hold in a sticky price model with external habit if a time‐varying tax rate on labor income is not implemented to fully eliminate the time‐varying distortions associated with external habit and monopoly power in goods market. The required labor income tax rate is inversely related to the risk‐free real interest rate and the markup in the goods market, but it is proportional to the degree of external habit. Under this circumstance, the optimal monetary policy commands a countercyclical interest rate, having a perfect negative correlation with tax rate in the sticky price model with external habit. If a time‐invariant tax is the only fiscal instrument, then the degree of external habit entails a gap between the private marginal rate of substitution between consumption and labor and the social marginal rate of substitution, generating an endogenous trade‐off between the stabilization of welfare‐relevant output gap and inflation. Under this circumstance, price stability is not the optimal policy. The monetary policy authority should optimally try to undo the time‐varying distortions associated with external habit and monopoly power in goods market by deviating from price stability.     

Local Public Funding of Higher Education When Skilled Labor is Imperfectly Mobile

If higher education is publicly funded by local (sub-federal) jurisdictions, while skilled labor is heterogeneous in responding to wage differentials between jurisdictions, the spillovers that result give rise to a disparity between the centralized output-maximizing allocation of resources to higher education and decentralized equilibria. Generally, decentralization leads to under-provision, which can be offset by inter-jurisdictional subsidies based on gross migration flows. But the extent of the discrepancy depends on the local balance of political forces. Indeed, when the welfare of native-born emigrants is highly valued while new immigrants carry little political weight, over-provision in equilibrium is possible.