| 1. |
- Agell, Jonas, et al.
(författare)
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On the Analytics of the Dynamic Laffer Curve
- 2000
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- In this paper, we analyze government budget balance within a simple model of endogenous growth. For the AK model, simple analytical conditions for a tax cut to be self-financing can be derived. The critical variable is not the tax rate per se, but the "transfer-adjusted tax rate". We discuss some conceptual issues in dynamic revenue analysis, and we explain why previous studies have arrived at seemingly contradictory results. Finally, we perform an empirical study of the transfer-adjusted tax rates of the OECD countries to see which country has the highest potential for fiscal improvements; it turns out that only a few countries have any potential for such "dynamic scoring".
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| 2. |
- Flam, Harry, et al.
(författare)
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EMU Effects on International Trade and Investment
- 2000
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- The partial effect of nominal exchange rate volatility on exports from each EMU member to the rest of the EMU is estimated on annual data for 1967-1997, using modern time series methods. The long run revelations between exhange rate volatility and exports are mostly negative and in several cases insignificantly different from zero. Thus, these estimates do not provide much support for the hypothesis that the elimination of nominal exchange rate volatility will significantly increase trade within the EMU. However, the EMU will presumably lead to geographical concentration of production and therefore indirectly to increased trade within the EMU and - during a transitional stage - to increased foreign direct investment, both within the EMU and between the EMU and the rest of the world.
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| 3. |
- Flam, Harry, et al.
(författare)
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The Young Ohlin on the Theory of "Interregional and International Trade"
- 2000
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Bertil Ohlin's internationel fame as an economist rests to a large extent on his 1933 monograph Interregional and International Trade (Ohlin, 1933). The monograph marked the definitive break with the Ricardian and early neoclassical theory of international trade. Eli Heckschler's contribution of 1919 did not become known to a wider audience until his article was published in English in 1949 (Heckschler, 1949, 1991). But Interregional and International Trade was not Ohlin's first formulation of the neoclassical theory of international trade; it was his third. His first attempt is his licentiate dissertation of 1922 and the second his doctoral dissertation published in 1924. The latter was published in English in 19941 under the title The Theory of Trade (Heckschler and Ohlin, 1991). The licentiate dissertation, entitled The Theory of Interregional Exchange has remained unstranslated until very recently (Ohlin, 1999). We will trace the development of Ohlin's thinking on international trade by comparing the three works. Special emphasis will be placed in The Theory of Interregional Exchange since it is the first and practically unknown. We have discussed and compared The Theory of Trade and Interregional and International Trade elsewhere (Flam and Flanders, 1991).
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| 4. |
- Lindbeck, Assar
(författare)
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Pensions and Contemporary Socioeconomic Change
- 2000
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- In developed countries, pensions systems emerged as a political response to socioeconomic changes brought about by industrialization and urbanization in the late 19th and early 20th centruries. Today, new socioeconomic changes create both rationales and political forces for revisions of existing pensions systems. Changes in demography, real wage growth and real interest rates are perhaps the most obvious examples. Increased instability of the family, more heterogeneity among individuals, greater internationel mobility of labor and capital, and amibitions to ecourage individual responsibility also have important implications for pensions systems. When discussing these issues, it is useful to set up a more elaborate classification of pension systems than the usual distinction between defined-benefit (DB) and defined-contribution (DV) systems. The choice of an appropriate taxonomy depends, of course, on the issues to be raised. One question that is focused on in this paper concerns the consequences of socioeconomic shocks on the distribution of income and the sharing of income risk among generations. it turns out that the distinction between pensions systems with exogenous and endogenous contribution rates (tax rates) then becomes crucial. Bu the paper also deals with socioeconomic changes that are induced by the pension system itself via behavioral adjustments of individuals - and the feedback of these changes on the pension system. When dealing with such adjustments, highly relevant features of pension systems are the degree to which they are actuarial and funded, respectively - two aspects that are related but not the identical. Six generic pension systems are classified in Section I, highlighting the distinctions mentioned above. The contribution rate is exogenous in two of these systems, while it is endogenous in the other four systems. Each of the six pension systems can ba varied considerably, both by incorporating elements from other systems and by introducing restricitions on contributions or benefits. Section II turns to the consequences of socioeconomic changes for the distribution of income and macroeconomic balance, while sections III and IV examine alternative pension reforms aimed at mitigating some of these consequences. A few of these reforms are "marginal" in the sense that certain rules of a pension system are modified, including both ad hoc policy measures and the introduction of various automatic adjustment mechanisms. Other reforms are "radical" since they imply shift to different types of pensions sytems. Section V concludes. As always when designing social insurance systems, it is necessary to strika balance between conflicting considerations, such as distribution, risk sharing and incentives. But it is also important to be concerned with the balance between paternalism and individual freedom of choice (and hence individual responsibility). This also raises the more general question of the appropriate role of government in society as a whole, including the control of capital markets and government intervention in the management of firms.
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| 5. |
- Persson, Mats
(författare)
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Five Fallacies in the Social Security Debate
- 2000
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper discusses five examples of the conventional wisdom that has often been expressed in the social security debate, even among academic economists. These are: 1. The major problem in most social security systems is that of demography: people simply live too long. 2. Disregarding the issue of demography, a Pay-As-You-Go system is inferior to a fully funded system since the former usually has a lower rate of return. 3. Disregarding the porfolio aspect (which might favor a PAYG system), a funded system dominates a PAYG system in a world of certainty. 4. The social security system is a suitable isntrument for intergenerational risk-sharing. 5. The government is a safe and reliable provider of insurance.
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| 6. |
- Svensson, Lars E.O., et al.
(författare)
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Indicator Variables for Optimal Policy
- 2000
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- The optimal weights on indicators in models with partial information about the state of the economy and forward-looking variables are derived and interpreted, both for equilibria under discretion and under commitment. An example of optimal monetary policy with a partially observable potential output and a forward-looking indicator is examined. The optimal response to the optimal estimate of potential output displays certainty-equivalence, whereas the optimal response to the imperfect observation of output depends on the noise in this observation.
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| 7. |
- Svensson, Lars E.O.
(författare)
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The First Year of the Eurosystem : Inflation Targeting or Not?
- 2000
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- This paper is a brief evaluation of the Eurosystem's monetary-policy regime after its first year, in particular of the extent to which it is similar to inflation targeting as practiced by an increasing number of central banks. I examine the Eurosystem's goals, framework for monetary-policy decisions and communication with outsiders. Criteria for evaluation are whether the goals are unambiguous and appropriate; whether the decision framework is efficient in collecting and processing information and reaching decisions that are appropriate relative to the goals; and whether the communication is effective in motivating decisions, simplifying external evaluation and thereby improving transparency and accountability. I also consider whether the actual instrument setting has been appropriate, given the informaion available at the times of decision.
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| 8. |
- Svensson, Lars E.O.
(författare)
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The Zero Bound in an Open Economy : A Foolproof Way of Escaping from a Liquidity Trap
- 2000
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- The paper examines the transmission mechanism of monetary policy in an open economy with and without a binding zero bound on nominal interest rates. In particular, a foolproof way of escaping from a liquidity trap is suggested, consisting of a price-level target path, a devaluation of the currency and a temporary exchange rate peg, which is later abandoned in favor of price-level or inflation targeting when the price-level target has been reached. This will jump-start the economy and escape deflation by a real depreciation of the domestic currency, a lower long real interest rate, and increased inflation expectations. The abandonment of the exchange-rate peg and the shift to price-level or inflation targeting will avoid the risk of overheating. Some conclusions for Japan are included.
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