Computing optimal tax equilibria

This paper proposes a technique for computing optimal taxes in a full general equilibrium model. It is based upon a fixed point algorithm of the type that is widely used to solve Walrasian general equilibrium models. Computing an optimal tax equilibrium is more difficult than solving a general equilibrium model only to the extent that the derivatives of the social welfare function and of the consumer demand functions must be calculated in the former case. Solutions to several sample problems are provided to demonstrate the technique. They suggest that optimal tax rates are exceedingly sensitive to the specification of the model used to derive them.     

Resource allocation in the nationalized energy sector of the United Kingdom

Resource allocation in the energy sector of the United Kingdom is a difficult area to plan, because demand and supply projections need to embrace both the large private sector oil industry and the public sector fuel industries. In addition, relationships between the latter are complex as they involve both competition and co-ordination. One approach to the problem has been to find common ground in the concept of marginal cost pricing, but there are practical difficulties in application. Government has encouraged the use of analytical techniques, such as corporate planning, by the fuel industries as a means of co-ordination in areas where market mechanisms may no longer always be effective.     

A Comparison of Relations Between Security Market Prices, Returns and Accounting Measures in Japan and the United States

We examine associations between accounting measures of earnings and stock returns in Japan over varying window lengths and compare them to those for the United States. Our results are consistent with the view that Japanese investors utilize less accounting information in their pricing of equities than do their U.S. counterparts. This was particularly evident in the 'boom' period of the mid to late 1980s when the fundamental values conveyed by accounting measures appear to have been largely ignored. The association increases with the inclusion of 1991, suggesting a return to more emphasis on fundamentals with the recent decline in stock prices.