A Note on Retrospectivity and the Tax System*

The legitimacy or otherwise of retrospective tax legislation has become a topical issue in Australian tax reform debates. This note considers the economic costs of permitting this budgetary practice. While under certain circumstances the standard welfare cost of the tax system may be reduced by retrospective announcement of tax arrangements, the costs of forming expectations. required by the possibility of retrospective tax legislation lead to a reduction in the value of economic activity.     

Shapley and Scarf housing markets with consumption externalities

We introduce externalities into the classical model by Shapley and Scarf; that is, agents care about others and their preferences are defined over allocations rather than over single indivisible goods. After collecting some results about the nonexistence of several cooperative solutions, we focus on stable allocations and propose domains of preferences that can guarantee that they both exist and form a stable set à la von Neumann and Morgenstern.     

Does seeing more deeply into a game increase one’s chances of winning?

The substantively rational value of the games studied in this paper does not help predict subject performance in the experiment at all. An accurate model must account for the cognitive ability of the people playing the game. This paper investigates whether the variation in measured rationality bounds is correlated with the probability of winning when playing against another person in games that exceed both players’ estimated rationality bound. Does seeing deeper into a game matter when neither player can see to the end of the game? Subjects with higher measured bounds win 63 percent of the time and the larger the difference the more frequently they win.     

THE EFFECTS OF U.S.-CHINA TRADE ON EMPLOYMENT AND WAGES IN THE U.S.-MEXICO BORDER REGION

This article investigates the impact of foreign competition from China on employment and wages in four U.S.-Mexico Border counties: Santa Cruz, Arizona; San Diego, California; El Paso, Texas; and Webb, Texas. Using disaggregated industry-level data between 1992 and 2006, we find that increased trade with China is associated with significantly lower county-industry employment and wages. In contrast, and as expected, increased imports from Mexico are positively related to increased employment and wages in U.S.-Mexico border counties. The results indicate that the U.S.-Mexico supply-chain relationship related to the maquiladora industry is significantly affected by Chinese competition. Implications for policy include an increased focus on federal programs that are intended to diversify the border economy . ( JEL F13, F43, F23)     

Where health care dollars are spent when pediatric palliative care is provided

Although pediatric palliative care has become more accessible over the past decade, little research has been performed that focuses on the financial impact of providing palliative care in an inpatient hospital setting. Using a case-controlled methodology, health care costs and the distribution of these costs were compared between children who received palliative care to those who did not. In comparing children who received palliative services to case controls, the similarities are striking, and the differences may have clinical significance. Children receiving care coordinated by the palliative care program underwent fewer radiology procedures and received greater assistance from pharmacologic services. This reflects greater attention and interventions provided to treat pain and provide comfort.