An Applied General Equilibrium Model to Assess the Impact of National Tax Changes on a Regional Economy

This paper presents two versions of an applied general equilibrium model for the regional economy of Andalusia, Spain, that differ in the closure rule adopted to describe the behavior of the public sector. We use the model with to analyze the impact that the reform of the personal income tax (Act 40/98) implemented in Spain as a whole would have had on the Andalusian region in particular. The model is of the neoclassical variety and includes not only the productive sectors of the economy but also the foreign sector and the government, which are usually absent from theoretical general equilibrium models. Both versions of the model are calibrated by using a Social Accounting Matrix of Andalusia for 1995. The analysis shows that the reform is not self-financing, not even partially, despite governmental claims. It also indicates that there is a positive but smaller than anticipated economic stimulus. In welfare terms, we find that the category of Urban Salaried consumers is the one that benefits the most in real income terms.     

Monetary policy and asset prices

The purpose of this paper is study the effect of monetary policy on asset prices. We study the properties of a monetary model in which a real asset is valued for its rate of return and for its liquidity. We show that money is essential if and only if real assets are scarce, in the precise sense that their supply is not sufficient to satisfy the demand for liquidity. Our model generates a clear connection between asset prices and monetary policy. When money grows at a higher rate, inflation is higher and the return on money decreases. In equilibrium, no arbitrage amounts to equating the real return of both objects. Therefore, the price of the asset increases in order to lower its real return. This negative relationship between inflation and asset returns is in the spirit of research in finance initiated in the early 1980s.     

The Skill Content of Inter- and Intra-Industry Trade: Evidence for the United Kingdom

In this paper we investigate the relative importance of net exchanges of skills embodied in intra-industry and inter-industry trade for the UK’s trade with some middle income countries. We also separately measure the net exchanges of skills embodied in vertical and horizontal intra-industry trade (IIT). We find that there are substantial factor exchanges involved in IIT, implying that traditional factor content studies may have seriously underestimated the actual factor content of total trade flows. This means that the adjustment effects of IIT may be greater than is often presumed. We also find, in line with theory, that vertical IIT involves similar net exchanges of labour of different skills to that of inter-industry trade, while horizontal IIT involves much smaller net exchanges of skills. JEL no. F11, F14     

Time-series forecasting: a testing of applications to the food-service industry

This paper examines the use of an intuitively appealing forecasting model for the food-service industry. After examining the current state of forecasting a brief introduction to the time-series method is undertaken. Finally, the simplest form of the model is applied in a case study.     

What accounts for the Chilean saving 'miracle'?

This paper examines the recent saving performance of the Chileaneconomy in the light of its long-run (1940–96) trends.The first conclusion that can be derived from the data is thatmost of the increase in private saving since the mid-1980s isdue to business saving. Household saving turns out to be a stationaryvariable with zero mean. Since business saving has a unit root,households do not seem to take the saving of firms into accountwhen making their own saving decisions. Within the theoreticalframework of a model of business investment with liquidity constraints,we estimate a VAR for business saving, private investment, publicsaving and foreign saving (the current account deficit). Weare able to determine that business saving is unaffected bypublic saving, but that, in the long run, foreign saving andbusiness saving are perfect substitutes. Private investment,business saving and foreign saving are jointly determined. Thepolicy conclusions are that policies that stimulate investmentare likely to lead to an increase in private saving, that policiesaimed at raising household saving will be ineffective, and thatincreases in public saving are very powerful for increasingdomestic saving in the long run.     

Implementation of EEC consumer protection directives in Spain

The paper informs about the state of Spanish law before and after Spain's entry into the European Community. Spanish law already included consumer protection in its constitution as well as an ambitious, yet defective, Act on Consumer Protection (LGDCU). After entry into the EEC, Spain had to adapt Community directives on consumer protection to the Spanish legal order. However, as the author demonstrates in detail, this process has been slow, complicated, and in many areas incomplete or even against Community obligations. The balance sheet of Spanish consumer policy after the completion of the Internal Market may be said to be negative. The principle of subsidiarity may allow for a renewal of consumer policy by strengthening national initiatives.

---

Die Umsetzung der EG-Richtlinien zur Verbraucherpolitik in Spanien

Zusammenfassung Der Beitrag berichtet über den Stand des spanischen Verbraucherschutzrechtes vor und nach Eintritt Spaniens in die Europäische Gemeinschaft. Vor Eintritt hatte Spanien weitgehende Verbraucherschutzvorschriften in seine Verfassung und in das allgemeine Verbraucherschutzgesetz von 1984 aufgenommen, die umfassende Ziele enthielten, welche allerdings rechtstechnisch mangelhaft formuliert waren. Mit dem Eintritt Spaniens in die Gemeinschaft übernahm es die Verpflichtungen aus den relevanten Verbraucherschutzdirektiven. Ihre Umsetzung ging jedoch zögerlich und mit erheblichen zeitlichen Verlusten einher. Einige Richtlinien sind bislang noch nicht fristgerecht umgesetzt worden. Insgesamt zeichnet der Autor ein eher kritisches Bild vom Stand des spanischen Verbraucherschutzrechtes nach Eintritt in die EG. Das Subsidiaritätsprinzip könnte zu einer Wiederbelebung nationaler Initiativen führen.

     

Cofinanced Public Extension in Nicaragua

How effective is agricultural extension? Is it worth the vastsums governments spend to provide it, mostly as a free service,to farmers worldwide? Relatively few studies exist that measureand compare the benefits of extension activities against theircosts. In the absence of such data, this pilot activity concentratedinstead on demand. Would demand for extension services be highif they were no longer free? The existence of solid demand wouldpresuppose some benefits from the service. Further, might chargingfor the service actually improve its quality and sustainability? The pilot program in Nicaragua described here set out to testwhether a truly demand—driven extension system aimed atfarmers with small-and medium-size holdings could be developed.The principal mechanism was a contribution by the farmer paidas a bonus to the extensionist: the aim was to introduce incentivesfor providers to improve the service through rewards linkedto the quality of their work and to establish direct accountabilityof extensionist to client. The outcomes showed that the cofinancingconcept can be successful. The article describes the design,implementation, and results in the expectation that the lessonslearned may be of interest elsewhere.