Why foreign savings fail to cause growth

Este artigo é uma formalização da crítica à estratégia do crescimento com poupança externa que um de seus autores vem sendo fazendo nos últimos anos. Apesar dos países de renda média serem pobres de capital, os déficits em conta corrente (poupança externa), financiado seja por empréstimos ou por investimentos externos diretos, não irá aumentar a taxa de acumulação de capital ou terá pouco impacto sobre ela, uma vez que os déficits de conta corrente estarão associados taxas de câmbio apreciadas, ordenados e salários aumentados artificialmente e altos níveis de consumo. Consequentemente, a taxa de substituição da poupança externa pela interna será relativamente alta, e o país será obrigado não a investir e crescer, mas a consumir. Apenas quando há grandes oportunidades de investimento, estimuladas por uma ampla diferença entre a taxa de lucro esperada e a taxa de juros de longo prazo, a propensão marginal ao consumo diminuirá suficientemente, a ponto de o lucro adicional originário do fluxo de capital estrangeiro ser usado para investimento, ao invés de para consumo. Neste caso especial, a taxa de substituição de poupança externa pela interna tenderá a ser menor e a poupança interna contribuirá positivamente para o crescimento

Essays in taxation and savings

Esta tese é composta por três artigos. Dois deles investigam assuntos afeitos a tributação e o terceiro é um artigo sobre o tema “poupança”'. Embora os objetos de análise sejam distintos, os três possuem como característica comum a aplicação de técnicas de econometria de dados em painel a bases de dados inéditas. Em dois dos artigos, utiliza-se estimação por GMM em modelos dinâmicos. Por sua vez, o artigo remanescente é uma aplicação de modelos de variável dependente latente. Abaixo, apresenta-se um breve resumo de cada artigo, começando pelos dois artigos de tributação, que dividem uma seção comum sobre o ICMS (o imposto estadual sobre valor adicionado) e terminando com o artigo sobre poupança. O primeiro artigo analisa a importância da fiscalização como instrumento para deter a evasão de tributos e aumentar a receita tributária, no caso de um imposto sobre valor adicionado, no contexto de um país em desenvolvimento. O estudo é realizado com dados do estado de São Paulo. Para tratar questões relativas a endogeneidade e inércia na série de receita tributária, empregam-se técnicas de painel dinâmico. Utiliza-se como variáveis de controle o nível do PIB regional e duas proxies para esforço fiscal: a quantidade e o valor das multas tributárias. Os resultados apontam impacto significativo do esforço fiscal nas receitas tributárias. O artigo evidencia, indiretamente, a forma como a evasão fiscal é afetada pela penalidade aplicada aos casos de sonegação. Suas conclusões também são relevantes no contexto das discussões sobre o federalismo fiscal brasileiro, especialmente no caso de uma reforma tributária potencial. O segundo artigo examina uma das principais tarefas das administrações tributárias: a escolha periódica de contribuintes para auditoria. A melhora na eficiência dos mecanismos de seleção de empresas tem o potencial de impactar positivamente a probabilidade de detecção de fraudes fiscais, provendo melhor alocação dos escassos recursos fiscais. Neste artigo, tentamos desenvolver este mecanismo calculando a probabilidade de sonegação associada a cada contribuinte. Isto é feito, no universo restrito de empresas auditadas, por meio da combinação “ótima” de diversos indicadores fiscais existentes e de informações dos resultados dos procedimentos de auditoria, em modelos de variável dependente latente. Após calculados os coeficientes, a probabilidade de sonegação é calculada para todo o universo de contribuintes. O método foi empregado em um painel com micro-dados de empresas sujeitas ao recolhimento de ICMS no âmbito da Delegacia Tributária de Guarulhos, no estado de São Paulo. O terceiro artigo analisa as baixas taxas de poupança dos países latino-americanos nas últimas décadas. Utilizando técnicas de dados em painel, identificam-se os determinantes da taxa de poupança. Em seguida, faz-se uma análise contrafactual usando a China, que tem apresentado altas taxas de poupança no mesmo período, como parâmetro. Atenção especial é dispensada ao Brasil, que tem ficado muito atrás dos seus pares no grupo dos BRICs neste quesito. O artigo contribui para a literatura existente em vários sentidos: emprega duas amplas bases de dados para analisar a influência de uma grande variedade de determinantes da taxa de poupança, incluindo variáveis demográficas e de previdência social; confirma resultados previamente encontrados na literatura, com a robustez conferida por bases de dados mais ricas; para alguns países latino-americanos, revela que as suas taxas de poupança tenderiam a aumentar se eles tivessem um comportamento mais semelhante ao da China em outras áreas, mas o incremento não seria tão dramático.

Neutralizing the tendency to the overvaluation of the exchange rate or assuming a foreign constraint and asking for foreign savings

The objectives of these notes are two. The first objective is to analyze whether the strategy of growth with absorption of foreign savings leads to a trajectory of the economy that is sustainable in the long run. The second one is to evaluate the possibility of success of a policy of administered devaluation of the exchange rate in Brazil.

Education, preferences for leisure, and the optimal income tax schedule

Recent advances in dynamic Mirrlees economies have incorporated the treatment of human capital investments as an important dimension of government policy. This paper adds to this literature by considering a two period economy where agents are di erentiated by their preferences for leisure and their productivity, both private information. The fact that productivity is only learnt later in an agent's life introduces uncertainty to agent's savings and human capital choices and makes optimal the use of multi-period tie-ins in the mechanism that characterizes the government policy. We show that optimal policies are often interim ine cient and that the introduction of these ine ciencies may take the form of marginal tax rates on labor income of varying sign and educational policies that include the discouragement of human capital acquisition. With regards to implementation, state-dependent linear taxes implement optimal savings, while human capital policies may require labor income taxes that depend directly on agents' schooling.

Two essays on education and governament policies

Whether human capital increases or decreases wage uncertainty is an open ques- tion from an empirical standpoint. Yet, most policy prescriptions regarding human capital formation are based on models that impose riskiness on this type of invest- ment. We slightly deviate from the rest of the literature by allowing for non-linear income taxes in a two period model. This enables us to derive prescriptions that are robust to the risk characteristics of human capital: savings should be discouraged, human capital investments encouraged and both types of investment driven to an e¢ cient level from an aggregate perspective. These prescriptions are also robust to what choices are observed, even though the policy instruments used to implement them are not.

The risk-properties of human capital and the design of government policies

Whether human capital increases or decreases wage uncertainty is an open question from an empirical standpoint. Yet, most policy prescriptions regarding human capital formation are based on models that impose riskiness on this type of investment. In a two period and finite type optimal income taxation problem we derive prescriptions that are robust to the risk characteristics of human capital: savings should be discouraged, human capital investments encouraged and both types of investment driven to an efficient level from an aggregate perspective. These prescriptions are also robust to the assumptions regarding what choices are observed, despite policy instruments being not.

Yet another reason to tax goods

The optimal taxation of goods, labor and capital income is considered in a two period model where: i) private information changes through time; ii) savings are not observed, and; iii) savings a§ect preferences conditional on the realization of types. The simultaneous appearance of these three elements cause optimal commodity taxes to depend on o§-equilibrium savings. As a consequence, separability no longer su¢ ces for the uniform taxation prescription of Atkinson and Stiglitz (AS) to obtain. If preferences are homothetic AS is partially restored: taxes are uniform within periods, however, future consumption is taxed at a higher rate than current consumption.

Monetary arrangements for emerging economies

In this paper we look at various alternatives for monetary regimes: dollarization, monetary union and local currency. We use an extension of the debt crisis model of Cole and Kehoe ([3], [4] and [5]), although we do not necessarily follow their sunspot interpretation. Our focus is to appraise the welfare of a country which is heavily dependent on international capital due to low savings, for example, and might suffer a speculative attack on its external public debt. We study the conditions under which countries will be better off adopting each one of the regimes described above. If it belongs to a monetary union or to a local currency regime, a default may be avoided by an ination tax on debt denominated in common or local currency, respectively. Under the former regime, the decision to inate depends on each member country's political inuence over the union's central bank, while, in the latter one, the country has full autonomy to decide about its monetary policy. The possibility that the government inuences the central bank to create ination tax for political reasons adversely affects the expected welfare of both regimes. Under dollarization, ination is ruled out and the country that is subject to an external debt crisis has no other option than to default. Accordingly, one of our main results is that shared ination control strengthens currencies and a common-currency regime is superior in terms of expected welfare to the local-currency one and to dollarization if external shocks that member countries suffer are strongly correlated to each other. On the other hand, dollarization is dominant if the room for political ination under the alternative regime is high. Finally, local currency is dominant if external shocks are uncorrelated and the room for political pressure is mild. We nish by comparing Brazil's and Argentina's recent experiences which resemble the dollarization and the local currency regimes, and appraising the incentives that member countries would have to unify their currencies in the following common markets: Southern Common Market, Andean Community of Nations and Central American Common Market.

Economic growth with foreign saving?

Highly indebted countries, particularly the Latin American ones, presented dismal economic outcomes in the 1990s, which are the consequence of the ‘growth cum foreign savings strategy’, or the Second Washington Consensus. Coupled with liberalization of international financial flows, such strategy, which did not make part of the first consensus, led the countries, in the wave of a new world wide capital flow cycle, to high current account deficits and increase in foreign debt, ignoring the solvency constraint and the debt threshold. In practical terms it involved overvalued currencies (low exchange rates) and high interest rates; in policy terms, the attempt to control de budget deficit while the current account deficit was ignored. The paradoxical consequence was the adoption by highly indebted countries of ‘exchange rate populism’, a less obvious but more dangerous form of economic populism.

Financiamento para o subdesenvolvimento, o Brasil e o segundo consenso de Washington

While in the social and in the ethical realms the Cardoso administration was successful, its economic outcomes were frustrating. In this administration’s eight years the investment rate did not increase and income per capita growth lagged, while the public debt and the foreign debt increased substantially. This poor economic performance may be explained by three chained causes: a mistake in agenda setting, the adoption of the Second Washington Consensus, and the alienation of elites. The decision of setting high inflation as the major problem to be tackled instead of achieving equilibrium in foreign accounts represented a major macroeconomic mistake, which can be explained by the Second Washington Consensus. This consensus proposed in the 1990s that highly indebted countries should grow counting on foreign savings, although this is not the experience among OECD countries. The outcome was to evaluate the real, to increase artificially wages and consumption, so that instead of growth what we have been increased indebtedness. Why this flopped strategy was adopted? Rich countries’ interests are not difficult to guess. On the part of Brazil, the only explanation is Brazilian elites’ alienation in relation to the country’s national interest. As a final outcome, the Cardoso administration ends with another balance of payments crisis, which was empowered by the coming presidential elections. Yet, the solvency situation of the Brazilian economy have been improving since the 1999 successful floatation of the real, so that I believe that, adopted a policy that deepens fiscal adjustment, while lowers the interest rate, and avoids new evaluation of the real, the country will eventually be able to avoid default.

Crises financeiras recentes e poupança externa

A Década de 90 foi Marcada Pela Ocorrência de Crises Financeiras. este Trabalho Investiga a Ligação entre a Recorrência À Poupança Externa, a Deterioração das Restrições de Solvência e Liquidez e a Eclosão das Crises Financeiras.

How does corruption hurt growth? Evidences about the effects of corruption on factors productivity and per capita income

Corruption is a phenomenon that plagues many countries and, mostly, walks hand in hand with inefficient institutional structures, which reduce the effectiveness of public and private investment. In countries with widespread corruption, for each monetary unit invested, a sizable share is wasted, implying less investment. Corruption can also be a burden on a nation’s wealth and economic growth, by driving away new investment and creating uncertainties regarding private and social rights. Thus, corruption can affect not only factors productivity, but also their accumulation, with detrimental consequences on a society’s social development. This article aims to analyze and measure the influence of corruption on a country’s wealth. It is implicitly admitted that the degree of institutional development has an adverse effect on the productivity of production factors, which implies in reduced per capita income. It is assumed that the level of wealth and economic growth depends on domestic savings, foster technological progress and a proper educational system. Corruption, within this framework, is not unlike an additional cost, which stifles the “effectiveness” of the investment. This article first discusses the key theories evaluating corruption’s economic consequences. Later, it analyzes the relation between institutional development, factor productivity and per capita income, based on the neoclassical approach to economic growth. Finally, it brings some empirical evidence regarding the effects of corruption on factor productivity, in a sample of 81 countries studied in 1998. The chief conclusion is that corruption negatively affects the wealth of a nation by reducing capital productivity, or its effectiveness.

Exchange rate: fix, float, or manage it?

The Exchange Rate is the Most Strategic of the Four Macroeconomic Prices. it Determines not Only Exports and Imports, But Also Real Wages, Consumption and the Savings Rate. Conventional Theory Holds That it is Impossible to Manage It, and That the Only Alternatives are to Fix or to Float It. the Experience of the East Asian Countries, That Use it Strategically, Demonstrates That This Claim is False.

Crítica do crescimento com poupança externa

O presente artigo é uma formalização da crítica à estratégia do crescimento com poupança externa. Apesar dos países de renda média serem pobres em capital, os déficits em conta corrente (poupança externa), financiados por empréstimos ou investimentos diretos externos, não necessariamente farão aumentar a taxa de acumulação de capital ou, mesmo, terão pouco impacto sobre ela, de forma que os déficits em conta serão associados a taxas de câmbio apreciadas, altos salários e ordenados reais e altos níveis de consumo. Conseqüentemente, o país se endividará para consumir, e não para investir e crescer. Apenas quando há grandes oportunidades de investimento, estimulados por uma diferença considerável entre a taxa de lucro esperada e a taxa de juros a longo prazo, o lucro adicional produzido pelo fluxo de capital estrangeiro será usado para investimento, e este trade-off entre a redução da poupança externa e interna não ocorrerá