Foreign capital, unemployment and national welfare

We consider a situation where foreign capital is allowed to flow only into the export-processing zone of an economy characterized by unemployment and pursuing protectionary policy. We derive conditions under which growth induced by an increase in the flow of foreign capital will be immiserizing. The results are derived when foreign capital does not directly flow into the protected sector but alters the composition of outputs in the other traded sectors through inter-sectoral reallocation of other resources.     

Tax reform,capital allocation and welfare gains in Norway

Summary This paper analyzes the potential welfare gains to the Norwegian economy of implementing a tax reform that broadens the tax base and lowers tax rates on capital income. For this purpose a dynamic general equilibrium model where agents have perfect foresight is developed. The model is highly aggregate, with only one production sector and one household sector, but it incorporates a very detailed treatment of the taxation of capital income. This includes a two-way classification of capital assets into three ownership classes: corporate, non-corporate and household, and across two types of assets: long-lived and short-lived. This suffices to capture those elements of the Norwegian tax code that give rise to the most important distortions, both intratemporally and intertemporally.I have benefited greatly from detailed comments from Don Fullerton, A. Lans Bovenberg and an anonymous referee. Please direct all correspondence to the author to: Fiscal Affairs Department, International Monetary Fund, 700 19th Street, N.W., Washington, D.C. 20431.     

China's value-added tax reform, capital accumulation, and welfare implications

This paper analyzes the effects of China's upcoming value-added tax (VAT) reform of removing investment from the tax base on capital accumulation and the welfare of the rich and the poor. Three alternative methods to make up for the loss of tax revenue are considered. The VAT reform with consumption tax being endogenous increases capital accumulation and the utility of both the rich and the poor. The VAT reform with the labor income tax rate being endogenous increases capital accumulation; and it decreases the utility of the rich and increases the utility of the poor (increases the utility of both the rich and the poor) if the rich has a higher rate or the same rate of time preference (if the rich has a lower rate of time preference). The VAT reform, accompanied by a cut in transfers to the poor, has no effect on capital accumulation if the rich and the poor have the same rate of time preference; it decreases (increases) capital accumulation if the rich has a higher (lower) rate of time preference; and it increases the utility of the rich and decreases the utility of the poor.     

Protection and welfare in the presence of dynamic learning

Zusammenfassung Protektion und Wohlfahrt unter der Annahme eines dynamischen Lernprozesses. - Dieser Aufsatz untersucht die Wohlfahrts?nderungen in einem Land, das auf ein Gut Z?lle erhebt, bei dem “learning by doing” m?glich ist. Es zeigt sich, da▾ die Protektion die Wohlfahrt selbst dort vermindert, wo das Lernen steigende Skalenertr?ge mit sich bringt, und da▾ Lernen generell die Kosten der Protektion vergr?▾ert. Eine Folge dieses Vergr?▾erungseffektes ist, da▾ sich Wohlfahrtsverluste minimieren lassen, wenn die Industrien geschützt werden, die sich bereits in einem fortgeschrittenen Stadium des Lernprozesses befinden. Handelsbeschr?nkungen durch Drittl?nder verringern (erh?hen) die Wohlfahrt von Export-(Import-)L?ndern. Die Verteilung dieser Gewinne (Verluste) im Zeitablauf h?ngt teilweise von der Lernrate in dem betreffenden Land ab.

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Résumé Protection et bien-être en présence d’un processus dynamique d’apprendre. - Dans cet article l’auteur analyse le changement en bien-être d’un pays qui impose ou est soumis aux taxes commerciales sur un bien qui est ouvert au “learning by doing”. Il démontre que le bien-être est réduit par la protection même si le processus d’apprendre exhibe des rendements croissants d’échelle et que, généralement, ce processus agrandit les co?ts de protection. Une implication de cet effet d’agrandissement est que les pertes en bien-être sont minimisées par des industries protégées qui se trouvent déjà dans des stades avancés du processus. Restrictions imposées par des pays tiers réduisent (augmentent) le bien-être des pays exportatrices (importatrices). La distribution intertemporales de ces gains (pertes) dépend, partiellement, du taux de croissance du processus d’apprendre d’un pays.

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Resumen Protectión y bienestar en presencia de aprendizaje dinámico. - Este trabajo analiza cambios en el bienestar de un país que impone o está sujeto a impuestos al comercio sobre un producto para el cual rige el lema “learning by doing”. Se demuestra que la protectión reduce el bienestar incluso cuando el aprendizaje presenta beneficios crecientes y que, en general, el aprendizaje aumenta el costo de la protección. Una implicación de este efecto de magnificación es que se minimizan las pérdidas de bienestar al proteger industrias que se encuentran en niveles avanzados de aprendizaje. Restricciones arancelarias frente a o en terceros países disminuyen (aumentan) el bienestar de países exportadores (importadores). La distribución intertemporal de estas ganancias (pérdidas) depende, en parte, de la tasa de aprendizaje de un país.

     

Foreign entry and domestic welfare

Foreign Entry and Domestic Welfare. — This paper discusses the consequences for domestic welfare of entry by foreign firms into a domestic market. A simple Bertrand model with differentiated products and a Cournot model with homogeneous goods are investigated and it is shown that welfare is non-monotonic in foreign entry in both cases. A “little” entry is harmful but a “lot” is beneficial. It is shown that this depends on the number of domestic firms in the industry.     

International capital market integration: Implications for convergence, growth, and welfare

This paper studies the effects of international capital market integration on welfare and the speed of adjustment in a two-region endogenous growth model. Monopolistic firms undertake research and development (R&D) to improve their productivity level. National and international knowledge spillovers affect the returns to R&D. The two countries differ with respect to the initial productivity level and R&D capability (which is a proxy for human capital and structural policies). Long-run productivity gaps are determined by the difference in R&D capability. Over time, there is conditional convergence in productivity levels. The speed of convergence is larger with integrated international capital markets than without. Long-run gaps in consumption levels are larger in the former situation than in the latter. Capital market integration harms (benefits) the leading (lagging) region if domestic spillovers are more important than international spillovers and differences in R&D capabilities are small.The authors research is supported by the Royal Netherlands Academy of Arts and Sciences. He thanks Lucas Bretschger, Theo van de Klundert, and Richard Nahuis, Thomas Steger, and Helmut Wagner for comments on an earlier version.     

Foreign debt and capital accumulation

Zusammenfassung Devisenschuld und Kapitalakkumulation. — Eine offene Volkswirtschaft kann Kredit aufnehmen, um Kapital zu akkumulieren. In dem Beitrag wird der Fall der Auslandsverschuldung mit einem Szenario verglichen, in dem ein Land seinen Kapitalstock durch Konsumverzicht aufbaut. Die Inzidenz der Verschuldung auf das Zeitprofil des Konsums und der Verschuldung wird analysiert. Das Modell spezifiziert auch das Zeitprofil der Handelsbilanz. Die intertemporalen Opportunit?tskosten der Kreditaufnahme werden er?rtert, und es werden Bedingungen abgeleitet, unter denen sich die Verschuldung für Kapitalbildung und Konsum oder nur für die Kapitalbildung lohnt. Im Paradigma des Modells werden Konstellationen diskutiert, unter denen es für das verschuldete Land schwieriger wird, Zinsen und Tilgung zu zahlen.

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Résumé Dette étrangère et accumulation de capital. — Une économie ouverte peut emprunter á l’étranger pour accumuler du capital. L’auteur compare le cas d’un emprunt étranger avec un scénario dans lequel un pays accumule du capital en remettant la consommation locale. Il analyse l’effet de l’emprunt sur le profil de temps de la consommation et de la dette. Le modèle spécifie aussi le profil de temps de la balance commerciale. Les co?ts d’opportunité d’emprunter sont analysés et les conditions sont spécifiées sous lesquelles il est profitable d’emprunter pour l’accumulation de capital et/oú pour la consommation. Dans le contexte du modèle l’auteur discute quelques phénomènes qui le rendent plus difficile au pays débiteur de payer les intérêts et de rembourser les dettes et même de rompre le contrat de crédit.

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Resumen Deuda externa y acumulación de capital. — En una economía abierta un país puede endeudarse a los efectos de acumular capital. En este trabajo se compara el endeudamiento externo con una situación en la cual un país acumula capital internamente posponiendo el consumo. Se analiza el impacto del endeudamiento sobre el perfil temporal del consumo y de la deuda. El modelo también especifica el perfil temporal del saldo comercial. Se estudian los costos de oportunidad del endeudamiento y se derivan las condiciones bajo las cuales resulta beneficioso endeudarse para acumular capital y/o para consumir. En el contexto del modelo se discuten algunos fenómenos que podrían dificultar al país deudor el pago del servicio de la deuda y de la deuda misma, y que podrían inducir a cuestionar el contrato de crédito.

     

Foreign capital and economic growth

A new but simple model of the impact of foreign capital–in particular foreign direct investment–on the economic growth rate of poor countries is described and tested. A feature of this model is that it aims to allow separately for structural economic effects and the direct impact on the balance of payments position. Results confirm the favourable impact of aid flows and domestic savings, but suggest that direct investment is associated with structural effects that retard growth. An attempt is made to interpret these results in a wider context than usual for the purpose of assessing possible policy implications.     

Foreign capital and the prospects for Zimbabwe

Very little is known about the development or the structure of foreign ownership of the Rhodesian economy, because of the general inadequacy of statistics resulting from participation in federation in the 1950s and UDI. This paper is an attempt to put the story together, by a series of estimates, a rather heavy reliance on statistics published in 1964/1965, and an assessment of scattered information appearing more recently. It is concluded that although Rhodesian private capital is relatively much weaker than its South African equivalent, it is dominant in some important sectors. Some possible consequences of this for Zimbabwean prospects are considered.     

资本流入对福利影响的模型分析

发展中国家要跳跃式的发展,必需借助外来资本。这个“借助”是要付出代价的,危机是极端的情况,在它背后更一般的是福利损失的事实。发展中国家在引入外国资本的情况下避免或者说减少福利损失应注意哪几个方面的问题,是本文要讨论的主要内容。     

Estimations of capital stock and consumption of fixed capital: Foreign experience

The paper considers the main approaches to estimating capital stock and consumption of fixed capital in world statistical practice, their advantages, and disadvantages. The possible directions of using foreign experience in domestic statistics and economic practice are analyzed.     

Novel indicators of the trade and welfare effects of agricultural distortions in OECD countries

Agricultural markets in OECD countries have long been highly distorted by government policies. Traditional weighted average aggregates of the price distortions involved, such as producer and consumer support estimates (PSEs and CSEs), can be poor indicators of the trade restrictiveness and economic welfare losses associated with them, especially if a country’s support estimates vary a lot across the product range. Certainly estimates of trade and welfare effects of price supports can be obtained from sectoral or economywide models using price elasticity estimates, but the results can be contentious if there is no consensus on what model specification and elasticity parameters to use. This paper shows that, if there is a willingness to accept simple assumptions about elasticities, it is possible to generate indicators of the welfare and trade restrictiveness of agricultural policies using no more than the price and quantity data needed to generate PSEs and CSEs. These new indexes thus provide an attractive supplement to the current policy monitoring regime developed by the OECD Secretariat.     

外资投向二线以下城市地产

1—5月,外商投资我国房地产市场金额达266亿元,同比增长57.3%。 自去年四季度以来,外商在中国楼市的投资额继续保持快速增长的势头。今年的1-3月、1-4月和1-5月,外商投资房地产金额分别为144亿元、222亿元和266亿元,同比增速分别为45．2％、62．3％和57．3％。     

国外关于隐性失业公开化问题的理论、实践及其对我国的启示

所谓隐性失业,是相对公开失业而言,表现的是劳动者与生产要素结合的一种状态,即生产过程中生产资料与劳动力的构成失衡,劳动力供给超过了由生产技术条件所决定的生产资料对劳动力的需求,而出现的低效用或负效用现象。从形式上,隐性失业者并没有失业,因为他们仍然与生产资料保持     

Foreign capital flows and economic growth in East Asian countries

This paper provides a quantitative assessment of the effect of various types of capital flow on the growth process of the East Asian countries, including China. The empirical analysis was based on dynamic panel data and we found; first, that domestic savings contribute positively to long-term economic growth. Second, we confirmed that FDI is growth enhancing and that its impact is felt both in the short and long run. Additionally, FDI influence on growth is much higher than domestic savings. Third, short-term capital inflow has adverse effect on the long-term as well as short-term growth prospects and it appears to be sensitive to long-term capital inflows. Fourth, long-term debt has positive effect on growth but its effect does somewhat disappear in the long-term. By and large, the observed positive contribution of FDI in the growth process of East Asian economies is a robust finding. From policy perspective, the evidence convincingly suggests that countries that are successful in attracting FDI can finance more investments and grow faster than those that deter FDI.     

外资国民待遇与我国外资法的调整

本文认为对外资国民待遇的含义界定应从内涵和外延两方面结合做出。从内涵上讲,应采纳"不低于"标准;从外延上讲,应限于东道国具体承诺的"不低于"领域。外资国民待遇的含义影响我国对外资法的调整,在外资法的调整中,要准确把握外资国民待遇的含义,充分运用好外资管辖权。     

Comparing the welfare effects of income and excise taxes in the presence of the other taxation paradox

This paper implements numerically a general equilibrium model in which all private producers are price makers and the government utilizes tax revenues to provide a public good. After deriving the partial equilibrium condition for an excise tax to increase price by more than the tax (for a monopoly firm), numerical examples are given, demonstrating this phenomenon for both partial and general equilibrium. In the general equilibrium context, optimal excise taxation and optimal flat-rate income taxation are compared. In the excise tax regime, prices increase by more than the taxes. In the income tax regime, prices actually decline relative to the no-tax regime. In all of the examples given, flat-rate income taxation is superior to excise taxation in terms of welfare. The author has benefitted from exceptionally helpful comments received from J. Ronnie Davis, John D. Wilson, Ralph W. Pfouts, and Amy Crews. He has also benefitted from conversations with Franz Gehrels, David E. Wildasin, Herbert J. Kiesling, and Harold York. The usual disclaimer applies.