VAR modelling and Haavelmo's probability approach to macroeconomic modelling

Some recent developments in the macroeconometric analysis of time series are discussed in the light of Haavelmo (1944). Experimental design in econometrics is discussed and related to the case of passive observation. The general ideas are illustrated with a analysis of the long-run and short-run structure in Danish monetary data.This paper has benefitted from useful comments from Søren Johansen, Claus Va strup and John Muellbauer, and in particular, from two unknown referees. Financial report from the joint committee of the Nordic Social Science Research Council is gratefully acknowledged.     

The complex attitudes to alcohol taxation

Alcoholic beverages are taxed at very different rates across the EU, which implies extensive cross-border shopping. Therefore, there is an ongoing debate about harmonization of alcohol taxes among countries. Sweden, with a tradition of high alcohol taxes due to public health arguments, has the highest excise duties on spirits in the EU. But, because of this, the occurrence and possible problems caused by cross-border shopping are also extensive. Using a questionnaire survey I analyse the Swedes’ attitudes to alcohol taxation and find that these two sides of the coin are important determinants. Many respondents want to decrease the alcohol tax, while some even want to increase it. Those most positive to alcohol taxation are those who regard increased alcohol consumption as a worrying problem and those living in areas where many adults are treated for alcohol-related diseases. However, the ordered-probit analysis also shows that those who support the EU membership are more supportive of reduced taxation to harmonize the Swedish tax with those in other EU countries. Those who live in regions where privately imported alcohol is substantial are also more reluctant to alcohol taxation.     

Tax evasion with a conscience

How do moral concerns affect fraud and detection, for example, tax compliance and the need for audits? We propose answers by exploring a psychological $2\times 1\times 2\times 1$ inspection game which incorporates belief-dependent guilt, unawareness, and third-party audience effects. Novel conclusions are drawn regarding whose behavior is affected by moral concerns (it's the inspector's more than the inspectee's) as well as the policy issue whether to allow the use of a principle of public access whereby tax returns are made public information.