Fiscal Equalization and Tax Enforcement

In many countries organized as federations, fiscal equalization schemes have been implemented to mitigate vertical or horizontal imbalances. Such schemes usually imply that the member states of the federation can only partly internalize (marginal) tax revenue before redistribution. Aside from the internalized marginal revenue, referred to as the marginal tax‐back rate, the remainder is redistributed. We investigate the extent to which state‐level authorities in such federation under‐exploit their tax bases. By means of a stylized model, we show that the member states have an incentive to align the effective tax rates on their residents with the level of the marginal tax‐back rate. We empirically test the model using state‐level and micro‐level taxpayer data, OLS regressions and natural experiments. Our empirical findings support the results from our theoretical model. Particularly, we find that states with a higher marginal tax‐back rate exploit the tax base to a higher extent.     

Sources of Sectoral Growth in an Economy Wide Context: The Case of U.S. Agriculture

Growth in U.S. agriculture is linked to the non-farm economy through domestic terms of trade and factor market adjustments. With almost stable input growth, the relatively large contributions from growth in Total Factor Productivity (TFP) are passed on to intermediate and final consumers in the form of declining real prices for primary farm products. The resulting net growth in the real value of farm output (GDP) is relatively low (0.25% per annum). The decomposition of TFP suggests that public agricultural stock of knowledge and infrastructure are robustly associated with TFP growth, while spill-overs from private agricultural and economy wide research and development (R and D) are positive but, relatively small.     

Codetermination,Price Competition and the Network Industry

This research develops a tractable two‐stage non‐cooperative game with complete information describing the behaviour of price‐setting firms that must choose to be profit maximisers or bargainers under codetermination in a network industry with horizontal product differentiation. The existing theoretical literature has already shown that codetermination might arise as the endogenous market outcome in a strategic competitive quantity‐setting duopoly. In sharp contrast with this result, the present article shows that codetermination does never emerge as a Nash equilibrium in a price‐setting non‐network duopoly. Then, it aims at highlighting the role of network externalities in determining changes of paradigm of the game and letting codetermination become a sub‐game perfect Nash equilibrium when prices are strategic substitutes or strategic complements. This equilibrium may be Pareto efficient. Results allow distinguishing between mandatory codetermination and voluntary codetermination. The article also proposes a model of endogenous codetermination according to which every firm may choose to bargain with its own corresponding union bargaining unit only whether the firm's bargaining strength is exactly the profit‐maximising one. The equilibrium outcomes emerging in this case range from a uniform Nash equilibrium, in which both firms are codetermined, to mixed Nash equilibria, in which only one of them chooses to be codetermined. These results are ‘network depending’ and do not hold in a non‐network duopoly.     

Poverty Traps, Indeterminacy, and the Wealth Distribution

We consider a one-sector growth model in continuous time with a production externality and endogenous labor supply. There is a continuum of households who have identical preferences but differ with respect to their initial wealth. We show that there exist economies such that an indeterminate steady state exists for some wealth distribution but not for others. A second result is that a redistribution of wealth may drive the economy from a steady state with strictly positive output to a poverty trap in which output converges asymptotically to zero. These results indicate that differences in the wealth distribution may be responsible for drastic differences in the long-run standard of living. Journal of Economic Literature Classification Numbers: D31, D50, O41.     

Market Failures in Real-Time Metering

Policies to promote real-time metering (RTM) require more than showing benefits from more timely responses to variations in cost. They require positive externalities to imply that too few meters would be installed through private transactions. RTM presents no systematic externalities when utilities must serve peak period users, and may present negative externalities under some conditions. Positive externalities are likely when electricity is rationed through blackouts. RTM may or may not increase welfare when peak period wholesale markets are not competitive; a prohibition on RTM might be appropriate in such situations even if metering itself were costless.     

矿业安全与健康供给的社会管制研究

以行政问责、矿产资源整合、区域性停产整顿等方式遏制矿难,见效不大。矿主是安全物品供给主体,但缺乏强迫矿主为矿工提供安全与健康物品的制度安排。只生产矿产品不生产安全与健康物品,让矿工承担成本而矿主增加收入属于市场失灵,市场失灵时的政府管制应定性为保护矿工基本人权的社会管制,必须通过社会管制强迫矿主供给矿工享用的集体物品而阻止矿主的不当收入。     

By What Criteria Do We Evaluate Accounting? Some Thoughts on Economic Welfare and the Archival Literature

The economic role of an accounting regime is to increase welfare through its effects—in conjunction with complementary institutions—on firm and household behavior. I review three major streams of the archival literature (real effects; price effects, including value relevance; and costly contracting), in terms of what they can and cannot reveal as proxies for welfare effects. One conclusion is that the partial correlations and average effects that predominate in this literature have provided valuable insights into the role of accounting in the economy, but provide limited and misleading proxies for welfare effects. A major concern is that teachers, students, and researchers—indeed, regulators and standard setters—raised on this literature could lose sight of, and underestimate, the fundamental contribution of accounting to aggregate welfare.     

Competition for goods in buyer-seller networks

Abstract. This paper studies competition in a network and how a network structure determines agents' individual payoffs. It constructs a general model of competition that can serve as a reduced form for specific models. The paper shows how agents' outside options, and hence their shares of surplus, derive from “opportunity paths” connecting them to direct and indirect alternative exchanges. Analyzing these paths, results show how third parties' links affect different agents' bargaining power. Even distant links may have large effects on agents' earnings. These payoff results, and the identification of the paths themselves, should prove useful to further analysis of network structure.     

Convergence,technological interdependence and spatial externalities: a spatial dynamic panel data analysis

This study adopts a spatial dynamic panel data approach and spatial quasi-maximum likelihood to re-estimate the speed of growth convergence in 91 countries based on technological interdependence and spatial externalities. We perform a conditional Lagrange multiplier test for spatial error dependence and find some differences to previous studies. First, the switch from a cross-sectional to a dynamic panel data framework enables the estimated rate of conditional convergence to be higher, more accurate and more appropriate for realistic and theoretical expectations. Second, the spatial Durbin model (SDM) is a general form of simplified model that considers spatial error correlation, and its likelihood ratio test for the theoretical model of ‘learning by doing’ effect provides further evidence. Finally, statistical tests find that spatial correlation not only occurs in each variable, but also appears in the error term. Thus, the SDM does not exist in the assumptions associated with the spatial error, which are not necessarily correct.     

Internal and external factors in innovation persistence

This paper contributes to the analysis of the persistence of innovation activities, as measured by total factor productivity (TFP), and explores its internal and external determinants stressing its path-dependent characteristics. The external conditions, namely the quality of local knowledge pools and the strength of the Schumpeterian rivalry, along with the internal conditions (the actual levels of dynamic capabilities, as proxied by wage levels and firm size) exert a specific and localised effect upon the persistent introduction of innovations. A multiple transition probability matrixes (MTPMs) approach has been implemented to capture the contingent effects of external factors on long-term innovation persistence. The empirical analysis of the dynamics of firm-level TFP for a sample of approximately 7000 Italian manufacturing companies observed during the years 1996–2005 is based on both the comparison of different transition probability matrixes and on dynamic discrete choice panel data models. The evidence provided by the test of MTPMs in sub-periods suggests that innovation persistence is path-dependent, as opposed to past-dependent.