Economics, Department of

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Why Do Most Countries Set High Tax Rates on Capital?

Peer reviewed: 
Yes, item is peer reviewed.
Date created: 
2010
Document type: 
Article
File(s): 

Optimal Policies and the Informal Sector

Peer reviewed: 
Yes, item is peer reviewed.
Date created: 
2012
Abstract: 

This paper characterizes optimal policies in the presence of tax evasion and undocumented workers. In equilibrium, domestic workers may work exclusively in the formal sector or also in the informal sector. Surprisingly, in equilibrium, wages are always equalized between domestic and undocumented workers, even if they do not work in the same sectors of the economy. This is driven by the interaction of firm level decisions with optimal government policy. We also find that enforcement may not always be decreasing in its cost, and that governments will optimally enforce labour market segmentation if enforcement costs are not too high.

Document type: 
Article
File(s): 

Rehabilitated or Not: An Informational Theory of Parole Decisions

Peer reviewed: 
Yes, item is peer reviewed.
Date created: 
2012
Document type: 
Article
File(s): 

Towards a Theory of Free Economic Zones

Author: 
Peer reviewed: 
Yes, item is peer reviewed.
Date created: 
1982
Abstract: 

This paper presents a theory capable of analysing the welfare effects of a wide variety of institutional innovations which have in common that they involve the deregulation of, or the lowering of tariffs and taxes on, a range of economic activities that can be effectively separated from the regulated, taxed and protected industries of which they are a part. The partial deregulation of economic activities in this manner will be shown to lead to the expansion of trade, but also to involve potential costs of locational diversion of trade and negative externalities. In the context of the debate over deregulation the development of free economic zones can be seen as a practical compromise that generates powerful local interest groups pushing partial deregulation against the well-known in­ terest groups opposing general deregulation.

Document type: 
Article
File(s): 

International Trade in Used Cars and Problems of Economic Development

Author: 
Peer reviewed: 
Yes, item is peer reviewed.
Date created: 
1980
Abstract: 

This paper provides a price-theoretic explanation of the well-known phenomenon that automobiles in developing countries depreciate less rapidly and are scrapped at a greater age than they are in industrial countries. This paper then argues that the renewal of barriers to free trade in used cars would lead to substantial welfare gains for developing countries through both capital gains implicit in the arbitrage and positive externalities from car repair industries. Negative externalities from increased car supplies are evaluated and the final part of this paper considers what policies might be needed to develop international trade in used cars on a large scale.

Document type: 
Article
File(s): 

Internationally Diversified Portfolios: Welfare Gains and Capital Flows

Author: 
Peer reviewed: 
Yes, item is peer reviewed.
Date created: 
1968
Abstract: 

The models of portfolio balance developed by Markowitz and Tobin explain the real world phenomenon of diversified asset holdings elegantly and properly. The models have been criticized, extended, and empirically tested; by now their basic content has become economic orthodoxy. Strangely, however, the analysis has not yet been applied explicitly to the explanation of long-term asset holdings that include claims denominated in foreign currency .The present paper fills this gap and yields some interesting results.First, the international diversification of portfolios is the source of an entirely new kind of world welfare gains from international economic relations, different from both the traditional "gains from trade" and in­ creased productivity flowing from the migration of the factors of pro­ duction. This specific theoretical proposition is illustrated with some calculations based on empirical data drawing on ex post realized rates of return from investment in 11 major stock markets of the world.Second, the theoretical model shows that international capital movements are a function not only of interest rate differentials but also of rates of growth in total asset holdings in two countries. As a result, capital may flow between countries when interest rate differentials are zero or negative and may not flow when a positive interest differential exists.Third, the analysis has some important policy implications in a growing world where monetary and fiscal policies are mixed to achieve internal and external balance.

Document type: 
Article
File(s): 

Foreign Exchange Earnings and Price Stabilization Schemes

Author: 
Peer reviewed: 
Yes, item is peer reviewed.
Date created: 
1971
Abstract: 

Whether price and output stabilization schemes for primary commodities are likely to increase or decrease foreign exchange earnings from what they would be otherwise is a question of great importance to countries contemplating the formation of such institutional arrangements. This paper sheds some light on this question and clarifies under what circumstances Ragnar Nurkse's assertion is valid that countries will fail to maximize foreign exchange earnings if they do stabilize prices.

Document type: 
Article
File(s): 

Risk, Uncertainty and Moral Hazard

Author: 
Peer reviewed: 
Yes, item is peer reviewed.
Date created: 
1971
Abstract: 

This paper gives precision o the meaning of the term "moral hazard". It then analyses the implications which the phenomenon of moral hazard has on the welfare effects of public insurance schemes and the present shortage of medical doctors and hospitals in the United States. I concludes that the existence of moral hazard does not necessarily invalidate the case for welfare increasing public provision of insurance as Pauly has claimed in his criticism of Arrow. Finally, the analysis explores the implications the phenomenon of moral hazard has for Knight's famous distinction between risk and uncertainty.

Document type: 
Article
File(s): 

The International Flow of Human Capital

Peer reviewed: 
Yes, item is peer reviewed.
Date created: 
1966
Document type: 
Article
File(s): 

The Adjustment Mechanism to Differential Rates of Monetary Expansion among the Countries of the European Economic Community

Peer reviewed: 
Yes, item is peer reviewed.
Date created: 
1962
Document type: 
Article
File(s):