Social security, public education and the growth-inequality relationship

We study how the relationship between economic growth and inequality depends upon the levels of funding of two of the largest government programs, public education and social security. We do this in the context of an overlapping generations economy with heterogeneous agents where the government collects a tax on labor income to finance these programs. We show that in our model an increase in government spending on social security reduces income inequality and can have a non-monotonic effect on growth. When the initial level of social security funding is low, as is the case in most poor economies, then its increase will enhance growth. When its funding level is high as is typical for developed countries, we show that its further increase can slow down growth while reducing income inequality. These results obtain regardless of whether the increase in social security funding is financed by a tax increase or by cutting the public education budget. We also find that the effects of increasing the level of public education expenditures or the overall size of the government budget (holding the budget composition fixed) are characterized by similar non-monotonic growth-inequality relationships.     

R&D税收激励、知识产权保护与企业的专利产出

文章以中国上市公司微观数据为样本,运用能克服样本自选择性的计量方法估计R&D税收激励的专利效应,并以知识生产函数分析其作用机制.结果表明,与没有获得R&D税收激励的厂商相比,获得R&D税收激励的厂商并不具有更高的专利产出.从作用机制上看,尽管R&D税收激励产生了显著的额外研发支出效应,但该效应并未直接增加企业的专利产出,中国的R&D税收激励面临类似"欧洲悖论"的困境.仅在知识产权保护的调节下,R&D税收激励引致的额外研发支出能间接增加专利产出,知识产权保护缓解了R&D税收激励政策失灵的风险.前述结论通过了稳健性检验.未来,为改善我国R&D税收激励的创新效应,走出"欧洲悖论"困境,需要优化R&D税收激励政策设计和强化知识产权保护的激励功效.     

Do R&D expenditures matter more than those of marketing to company performance? The moderating role of industry characteristics and investment density

Confronting competitive environment, enterprises differentiate their product by promoting their R&D or marketing capacities. Scholars have verified that there is a direct relationship and a deferred effect between R&D expenditures and firm performance, but that there exists an inconsistency between marketing expenditures and firm performance. However, previous studies have neglected to analyse and compare the impact of corporate R&D and marketing investment on performance, and also ignored the moderating effects of different industry characteristics and investment densities. The study attempts to fill the gap by constructing a model to accommodate all these factors. The empirical results indicate that R&D and marketing expenditures have a positive impact on enterprise operating performance, and that there is a longer deferred effect in R&D expenditures than in marketing expenditures. By investing in R&D expenditures, manufacturing enterprises can increase their performance more than in service enterprises, and electronic enterprises can improve their performance compared with other types of firms. Finally, investments with higher R&D density can result in a higher performance.     

Time-consistent subsidies to unlucky firms

This paper examines government subsidies that prevent unlucky firms from going out of business. Subsidies can save jobs and prevent an increase in unemployment insurance expenditures, but they modify the incentives of the firms to exert adequate effort. If firms expect to obtain help, they may not undertake enough effort to decrease the probability of needing help. The cost-minimizing government must therefore trade off the savings in unemployment insurance expenditures against the increased bill in subsidies to the firms. The analysis shows that this trade-off is significantly affected by the level of commitment of the government; if the government cannot commit to a future subsidy policy, the level of subsidies will be unambiguously higher, the level of effort by the firms lower, and the number of firms making losses higher than if the government could so commit.     

行业知识产权风险与企业自主创新投资研究

基于2005-2007年广东省高技术企业调查数据,结合我国的知识产权制度和市场背景,首次从行业层面界定并衡量企业自主创新中的知识产权风险——知识外溢风险与知识产权法律风险,并实证检验了两种风险对企业研究与开发投资的影响。研究发现,知识外溢程度的提高并未降低企业的研究与开发投资,知识外溢的正外部性效应大于风险效应,而知识产权法律风险则不利于企业的研究与开发投资。最后,为企业的自主创新管理和知识产权管理提供有益的建议。     

The U.S. health care expenditure: evidence from 2001 to 2009

This study utilizes state-level data from 2001 to 2009 to estimate the impact of the 2007 financial crisis upon health care expenditures. Higher death rates are consistently found to have a positive and statistically significant impact on health expenditures. While mental health and COPD are not generally found to impact expenditures, increases in the percentage of the population diagnosed with cholesterol and obesity tend to increase health expenditures. Increases in health expenditures slowed considerably after the financial crisis. Even though recessions (high unemployment rates) are generally found to have a positive impact on health expenditures, the post-financial crisis time period is estimated to have much lower health expenditures than in other time periods. Our results can be used to give insight into the conditions under which the slower rate of increase in health expenditures can be expected to increase. More research will be needed to be able to more completely explore not only the reasons for these changes in health expenditures but also whether they are likely to continue into the future.     

Public provision of health insurance and aggregate saving in an overlapping generations model with endogenous health risk: The South Korean case

This paper examines the effect of expanding public health insurance in South Korea on medical expenditures and aggregate saving using an overlapping generations model with endogenous health risk. South Korea had a substantial underinsured population, which is aging rapidly. Higher public health insurance benefits reduce individual medical expenditure and health risks but lead to a modest decline in individual and aggregate saving. Even after the expansion, the medical care coverage remains incomplete, and the elderly face a substantial risk of out-of-pocket medical expenditures.     

Optimal Taxation of Bequests in a Model with Initial Wealth*

We formulate an optimal‐taxation model where parents leave bequests to their descendants for altruistic reasons. In contrast to the standard model, individuals differ not only in earning abilities, but also in initial (inherited) wealth. In this model, a redistributive motive for an inheritance tax – which is equivalent to a uniform tax on all expenditures – arises, given that initial wealth increases with earning abilities. The introduction of the inheritance tax either increases intertemporal social welfare or has an ambiguous effect, depending on whether the external effect related to altruism is accounted for in the social objective.     

School Finance Litigation, Tax and Expenditure Limitations, and Education Spending

Since the early 1970s, litigation in many U.S. states has led to education finance reform. Over the same period, many states have imposed new tax and expenditure limitations (TELs) on local governments. The imposition of a TEL may alter how local and state education expenditures change subsequent to court-mandated decreases in spending inequality. Similarly, the effectiveness of TELs in limiting local education expenditures may be influenced by reform. To better evaluate the effects of reform and TELs on education spending, this article considers them jointly and finds that reform has a negative effect on local own-source education expenditures only in the presence of TELs. In the absence of court-ordered reform, TELs decrease own-source expenditure, but the effect is less pronounced than when TELs are present with reform. When both are present, state government spending on education is higher. Also TELs and court-ordered reform independently increase state government spending on education. (JEL H72 , I22 )     

The Risks and Dynamics of Health Care Expenditures in Urban China： An Illustration in Kunshan City

This paper examines the individual financial risk of health care expenditures over time in urban China, .using longitudinal health expenditure data from 2005 to 2007 in Kunshan City, Jiangsu Province, China. We find that the stochastic process of log total health care expenditures is well represented by the sum of an AR（3） process and white noise process. Simulating this model, we find that the urban health insurance system protects enrollees from the risk of catastrophic health care expenditures by bearing the majority of the health care expenditures. However, out-of-pocket health care expenditures represents a considerable risk to an individual＇s financial status.     

Fiscal federalism in rentier regions: Evidence from Russia

When does sub-national fiscal autonomy prompt regional growth and recovery and, under what conditions, does it have adverse effects? We argue that unearned income streams, particularly in the form of revenues from natural resource production or from budgetary transfers from the central government, transform regions dependent on these income sources into rentier regions. Governments in these regions can use local control over revenues and expenditures to shelter certain firms, i.e., natural resource producers or loss-making enterprises, from market forces. Using fiscal data from 80 Russian regions from 1996 to 1999, we test this hypothesis in both cross-sectional and panel specifications. Our results indicate that tax retention, which is a proxy for fiscal autonomy, has had a positive effect on regional reform and investment since the break-up of the Soviet Union. However, we also find that this effect decreases as rentable income streams to regions increase. Journal of Comparative Economics 33 (4) (2005) 814–834.     

Environmental regulation and the productivity of Japanese manufacturing industries

This paper attempts to provide empirical evidence on issues concerning: (a) the effect of the stringency of environmental regulations (as measured by pollution control expenditures) on innovative activity (as measured by R&D expenditures) and on the average age of capital stock and (b) the productivity enhancement effect of environmental regulations in Japanese manufacturing industries. The empirical findings in the paper show that the pollution control expenditures have a positive relationship with the R&D expenditures and have a negative relationship with the average age of capital stock. It is also shown that increases in R&D investment stimulated by the regulatory stringency have a significant positive effect on the growth rate of total factor productivity.     

STRATEGIC LOBBYING BY POTENTIAL INDUSTRY ENTRANTS*

A firm which lobbies government for a change in policy, say an import tariff, can increase its profits in two ways. First, the policy can increase the profits of all firms in the industry. This effect therefore involves a free-rider problem. Second, a firm's lobbying expenditures may signal other firms about its costs and interests. For example, a firm with low marginal costs may profit much from an import ban. Other firms which see that this firm expects to profit much from the ban may decide not to enter the industry. This may further increase the low-cost firm's profits.     

Obsolescence and modernization in the growth process

In this paper, an endogenous growth model is built up incorporating Schumpeterian creative destruction and embodied technological progress. Under embodiment, long run growth is affected by two opposite effects: (i) obsolescence costs add to the user cost of capital, which have a negative effect on research efforts; and (ii) the modernization of capital increases the demand for investment goods, raising the incentives to undertake research activities. Applied to the understanding of the growth enhancing role of both capital and R&D subsidies, we conclude that the positive effect of modernization generally more than compensates the negative effect of obsolescence.     

THE MORTALITY COST OF EXPENDITURES

This paper updates the mortality cost of expenditures, which has relevance to a broad range of policies, including regulations, wars, and COVID‐19 restrictions. Because changes in income lead to changes in mortality risk, health investments costing more per life saved than a threshold cost‐per‐life‐saved cutoff level are expected to increase mortality risk. This article discusses the mechanisms driving this relationship and provides recent empirical support. The 2019 cost‐per‐life‐saved cutoff level at which expenditures increase mortality risk has a lower bound of $83.1 million and an upper bound of $133.8 million, with a midpoint of $108.5 million. (JEL D61, I18, J17, K32)     

ENDOGENOUS CONSUMER PARTICIPATION AND THE RECYCLING PROBLEM*

We endogenise the extent of consumer participation in the recycling process, and analyse its effect on the ‘recycling problem’. When recycling requires consumers to undertake costly sorting activities to separate scrap from household waste, they will participate only if the net reward from sorting is positive. Consumers' sorting cost is subject to a network effect arising due to social norms. With heterogeneous consumers differing in terms of their sorting cost, the entire output of the recyclable product may not be subsequently available as scrap to the recycling firms. This increases the virgin producer's monopoly power, and may also lead to multiple equilibria if the network effect of sorting is sufficiently large. The latter result suggests a role for the government in influencing equilibrium selection to improve social welfare. Depending on the fraction of consumers that participate in recycling, increased societal pressure on consumers to recycle may decrease consumer participation and increase the virgin producer's market power.     

What determines public education expenditures in Russia?1

Recent studies suggest that the allocation of expenditures in education is important for growth. The state of public education spending in many transition economies highlights the need for an assessment of the nature of education expenditures in these countries. This paper attempts to fill this gap in the literature by estimating the determinants of education expenditures in the Russian Federation. Results from panel data analysis show that revenue and the student‐population ratio have a positive impact on education expenditures while the effect of population density is negative. Three regional variables also show significant impact. The income and price elasticity of public education expenditures are estimated to be 0.57 and ?0.18, respectively, a result comparable to studies from other countries. The results presented here provide insight into how fiscal institutions and the structure of the political process in Russia may affect the degree of resource allocation in the educational sector during the transition process.     

公共支出结构与经济增长关系的实证分析

采用1980～2004年的统计数据,实证分析了公共支出结构与经济增长之间的关系.研究发现:社会性支出对经济增长有一定的促进作用,但统计上并不显著;经济性支出对经济增长具有不显著负相关性;维持性支出对经济增长存在显著负相关性.据此,提出了增加社会性支出、缩减经济性支出与维持性支出的公共支出结构调整的政策建议.     

Stock prices and inflation hedged firms

As the Federal Reserve continues its near-zero rate policy, the threat of inflation remains a concern among both policymakers and businesses. This article uses over 30 years of accounting data and stock returns to examine how publicly traded firms respond to increasing inflation expectations. We first examine whether firms make balance sheet adjustments in response to expected inflation. We then examine whether these activities have a positive effect on stock prices. We find that firms increase inventory, increase capital expenditures and reduce long-term debt when there is an increased expectation of inflation. We then find that firms that increase inventory in this economic regime are rewarded in the market. Markets also reward firms that increase their cash positions and reduce long-term debt possibly suggesting investor flight to safety.     

Providing global public goods under uncertainty

We study how uncertainty and risk aversion affect international agreements to supply global public goods. We consider a benchmark model with homogeneous countries and linear payoffs. When countries directly contribute to a public good, uncertainty tends to lower signatories' efforts but may increase participation. Despite risk aversion, uncertainty may improve welfare. In contrast, when countries try to reduce a global public bad, uncertainty tends to increase signatories' efforts and decrease participation. In that case, an ex-ante reduction of uncertainty may have a large positive multiplier effect on welfare.