The size of the underground economy in Germany: A correction of the record and new evidence from the Modified-Cash-deposit-Ratio approach

Based on the Ahumada et al. (2007, Review of Income and Wealth) critique we revise existing estimates of the size of the German underground economy. Among other things, it turns out that most of these estimates are untenable and that the tax pressure induced size of the German underground economy may be much lower than previously thought. To this extent, German policy and law makers have been misguided during the last three decades. Therefore, we introduce the Modified-Cash-Deposit-Ratio (MCDR) approach, which is not subject to the recent critique and apply it to Germany for the period 1960 to 2008. JEL: O17, Q41, C22, Keywords: underground economy, shadow economy, cash-depositratio, currency demand approach, MIMIC approach

“Tonnage tax” : régimen especial de las entidades navieras en función del tonelaje

El present treball analitzarà el règim del Tonnage Tax com a resposta legislativa de la Unió Europea davant la continua davallada de la seva flota mercant, derivada de la competència provinent de tercers països. S’oferirà una visió general d’aquest règim especial de l’Impost sobre Societats en l’àmbit de la Unió Europea prestant un especial interès a la regulació d’aquest a Espanya, al temps que procedirem a l’estudi en detall d’una de les aplicacions pràctiques del Tonnage Tax a Espanya que més ha atret l’atenció dels inversors, el “Tax Lease”.

Environmental Tax on Products and Services Based on Their Carbon Footprint: A Case Study of the Pulp and Paper Sector

The main aim of this work is to define an environmental tax on products and services based on their carbon footprint. We examine the relevance of conventional life cycle analysis (LCA) and environmentally extended input-output analysis (EIO) as methodological tools to identify emission intensities of products and services on which the tax is based. The short-term price effects of the tax and the policy implications of considering non-GHG are also analyzed. The results from the specific case study on pulp production show that the environmental tax rate based on the LCA approach (1,8%) is higher than both EIO approaches (0,8% for product and 1,4% for industry approach), but they are comparable. Even though LCA is more product specific and provides detailed analysis, EIO would be the more relevant approach to apply economy wide environmental tax. When the environmental tax considers non-GHG emissions instead of only CO2, sectors such as agriculture, mining of coal and extraction of peat, and food exhibit higher environmental tax and price effects. Therefore, it is worthwhile for policy makers to pay attention on the implication of considering only CO2 tax or GHG emissions tax in order for such a policy measure to be effective and meaningful. Keywords: Environmental tax; Life cycle analysis; Environmental input-output analysis.

Foundation Funded OER vs. Tax Payer Funded OER - A Tale of Two Mandates

Compare and contrast foundation funded OER with taxpayer funded OER in terms of global vs. local goals, licensing options, use cases, and outcomes.

Ecological Footprint Inequality across countries: the role of environment intensity, income and interaction effects

Recently, White (2007) analysed the international inequalities in Ecological Footprints per capita (EF hereafter) based on a two-factor decomposition of an index from the Atkinson family (Atkinson (1970)). Specifically, this paper evaluated the separate role of environment intensity (EF/GDP) and average income as explanatory factors for these global inequalities. However, in addition to other comments on their appeal, this decomposition suffers from the serious limitation of the omission of the role exerted by probable factorial correlation (York et al. (2005)). This paper proposes, by way of an alternative, a decomposition of a conceptually similar index like Theil’s (Theil, 1967) which, in effect, permits clear decomposition in terms of the role of both factors plus an inter-factor correlation, in line with Duro and Padilla (2006). This decomposition might, in turn, be extended to group inequality components (Shorrocks, 1980), an analysis that cannot be conducted in the case of the Atkinson indices. The proposed methodology is implemented empirically with the aim of analysing the international inequalities in EF per capita for the 1980-2007 period and, amongst other results, we find that, indeed, the interactive component explains, to a significant extent, the apparent pattern of stability observed in overall international inequalities.

Ecological Footprint Inequality across countries: the role of environment intensity, income and interaction effects

Recently, White (2007) analysed the international inequalities in Ecological Footprints per capita (EF hereafter) based on a two-factor decomposition of an index from the Atkinson family (Atkinson (1970)). Specifically, this paper evaluated the separate role of environment intensity (EF/GDP) and average income as explanatory factors for these global inequalities. However, in addition to other comments on their appeal, this decomposition suffers from the serious limitation of the omission of the role exerted by probable factorial correlation (York et al. (2005)). This paper proposes, by way of an alternative, a decomposition of a conceptually similar index like Theil’s (Theil, 1967) which, in effect, permits clear decomposition in terms of the role of both factors plus an inter-factor correlation, in line with Duro and Padilla (2006). This decomposition might, in turn, be extended to group inequality components (Shorrocks, 1980), an analysis that cannot be conducted in the case of the Atkinson indices. The proposed methodology is implemented empirically with the aim of analysing the international inequalities in EF per capita for the 1980-2007 period and, amongst other results, we find that, indeed, the interactive component explains, to a significant extent, the apparent pattern of stability observed in overall international inequalities. Key words: ecological footprint; international environmental distribution; inequality decomposition

The efficiency of direct payments versus tax reductions under uncertainty

This paper analyzes the optimal behavior of farmers in the presence of direct payments and uncertainty. In an empirical analysis for Switzerland, it confirms previously obtained theoretical results and determines the magnitude of the theoretical predicted effects. The results show that direct payments increase agricultural production between 3.7% to 4.8%. Alternatively to direct payments, the production effect of tax reductions is evaluated in order to determine its magnitude. The empirical analysis corroborates the theoretical results of the literature and demonstrates that tax reductions are also distorting, but to a substantially lesser degree if losses are not offset. However, tax reductions, independently whether losses are offset or not, lead to higher government spending than pure direct payments

Litterfall and mineral return in two cork-oak forests in northeast spain

Seasonal trends in littertall and potential mineral return were studied in two cork-oak forest sites in the northeastern Iberian peninsula. The estimated average litter production was 3.9.M- gy.e1ahar for one site and 4.6 .M- gy.e1ahar for the other; these figures are similar to those reported for holm-oak (Quercus ilex) forests in the same area. Seasonal litterfall patterns were typical of Mediterranean forest ecosystems. Leaves accounted for 46 to 78% of the total dry matter. Their annual weighted-average mineral composition was low in macronutrients (N 8-9; K 4-5; Mg 0.8-1.3; Ca 9-10 and P 0.4-1 m-)g.1g and relatively high in micronutrients such as Mn (2-2.2 m-)g.1g or Fe (0.3-0.4 m)-g..1g Minimum N and P concentrations were found during the growth period. Estimates of potential mineral return for an annual cycle were N 38-52, P 2.1-5.2, K 20-28, Ca 44-53 and Mg 5.4-5.0 k-,g.1ha depending on the site biomass and fertility

Tax incentives and direct support for R&D: What do firms use and why?

This paper studies whether firms' use of R&D subsidies and R&D tax incentives is correlated to two sources of underinvestment in R&D, financing constraints and appropriability. We find that financially constrained SMEs are less likely to use R&D tax credits and more likely to obtain subsidies. SMEs using legal methods to protect their intellectual property are more likely to use tax incentives. Results are ambiguous for large firms. For both having previous experience in R&D increases the likelihood of using tax incentives, while it reduces the likelihood of using exclusively subsidies, suggesting that the latter induce entry into R&D. Results imply that direct funding and tax credits do not have the same ability to address each source of R&D underinvestment, and that on average subsidies may be better suited than tax credits at least for SMEs. From a policy perspective these tools may be complements rather than substitutes.

Social bases of changing income distributions

On the backdrop of very little sociological concern with rising income inequality, this paper examines how key changes in sociodemographic behaviour may help shed additional light on changes in household income distribution and especially on long-term income dynamics and inter-generational mobility. The paper argues that the joint effect of rising marital homogamy in terms of human capital and labour supply contributes generally to widen the income gap between households. Only uner very restrictive conditions, namely when the labour supply of low educated women grows dis-proportionally fast, will women's earnings contribute to more equality. Finally, the paper suggests that women's rising employment commitments contribute positively to equalizing the opportunity structure both via the income effect and if quality care is available, also via more homogenous cultural and cognitive stimulation of children. Mother's work does not generally have adverse effects for children's development.

Predictable Life-Cycle Shocks, Income Risk and Consumption Inequality

Was the increase in income inequality in the US due to permanent shocks or merely to an increase in the variance of transitory shocks? The implications for consumption and welfare depend crucially on the answer to this question. We use CEX repeated cross-section data on consumption and income to decompose idiosyncratic changes in income into predictable life-cycle changes, transitory and permanent shocks and estimate the contribution of each to total inequality. Our model fits the joint evolution of consumption and income inequality well and delivers two main results. First, we find that permanent changes in income explain all of the increase in inequality in the 1980s and 90s. Second, we reconcile this finding with the fact that consumption inequality did not increase much over this period. Our results support the view that many permanent changes in income are predictable for consumers, even if they look unpredictable to the econometrician, consistent with models of heterogeneous income profiles.

Social spending and demographics: The role of public policies in the intergenerational redistribution of income. Empirical evidence from Spain and Catalonia

The demographic shift underway in Southern Europe requires a revision of some of the fundamental principles of the traditional welfare state. We analyze the evolution of several aspects of welfare and social expenditure over the last two decades. We find that in the context of the present demographic changes and real estate boom current social and pension policy leads to a new distribution of benefits and burdens which is highly intergenerationally unequal. We argue for a revised definition of public policy based on Musgrave's proposition as a possible rule for an intergenerationally fair distribution.

The world distribution of income (estimated from individual country distributions)

We estimate the world distribution of income by integrating individualincome distributions for 125 countries between 1970 and 1998. Weestimate poverty rates and headcounts by integrating the density functionbelow the $1/day and $2/day poverty lines. We find that poverty ratesdecline substantially over the last twenty years. We compute povertyheadcounts and find that the number of one-dollar poor declined by 235million between 1976 and 1998. The number of $2/day poor declined by 450million over the same period. We analyze poverty across different regionsand countries. Asia is a great success, especially after 1980. LatinAmerica reduced poverty substantially in the 1970s but progress stoppedin the 1980s and 1990s. The worst performer was Africa, where povertyrates increased substantially over the last thirty years: the number of$1/day poor in Africa increased by 175 million between 1970 and 1998,and the number of $2/day poor increased by 227. Africa hosted 11% ofthe world s poor in 1960. It hosted 66% of them in 1998. We estimatenine indexes of income inequality implied by our world distribution ofincome. All of them show substantial reductions in global incomeinequality during the 1980s and 1990s.

On the distribution of income and worker assignment under intra-firm spillovers, with an application to ideas and networks

We study the earnings structure and the equilibrium assignment of workers when workers exert intra-firm spillovers on each other.We allow for arbitrary spillovers provided output depends on some aggregate index of workers' skill. Despite the possibility of increasing returns to skills, equilibrium typically exists. We show that equilibrium will typically be segregated; that the skill space can be partitioned into a set of segments and any firm hires from only one segment. Next, we apply the model to analyze the effect of information technology on segmentation and the distribution of income. There are two types of human capital, productivity and creativity, i.e. the ability to produce ideas that may be duplicated over a network. Under plausible assumptions, inequality rises and then falls when network size increases, and the poorest workers cannot lose. We also analyze the impact of an improvement in worker quality and of an increased international mobility of ideas.

Oil price shocks, income and democracy

We examine the effect of oil price fluctuations ondemocratic institutions over the 1960-2007 period. We also exploitthe very persistent response of income to oil price fluctuations tostudy the effect of persistent (oil price-driven) income shocks ondemocracy. Our results indicate that countries with greater net oilexports over GDP see improvements in democratic institutionsfollowing upturns in international oil prices. We estimate that a 1percentage point increase in per capita GDP growth due to apositive oil price shock increases the Polity democracy score byaround 0.2 percentage points on impact and by around 2 percentagepoints in the long run. The effect on the probability of a democratictransition is around 0.4 percentage points.