Asymmetric Information, Tax Evasion and Alternative Instruments of Government Revenue

Using a pure-exchange overlapping generations model, characterized with tax evasion and information asymmetry between the government (the social planner) and the financial intermediaries, we try and seek for the optimal tax and seigniorage plans, derived from the welfare maximizing objective of the social planner. We show that irrespective of whether the economy is characterized by tax evasion, or asymmetric information, a benevolent social planner, maximizing welfare and simultaneously financing the budget constraint, should optimally rely on explicit rather than implicit taxation.

An Economic Analysis of Drawing Lines in the Sea

It is shown that low dispute costs relative to expected resource rents from oceanic resources favor drawn out disputes over maritime boundaries; asymmetric dispute costs favor agreement on boundaries wanted by the low dispute cost state party; and high symmetric dispute costs favor formation of joint development zones. The fact that most maritime boundaries have not yet been drawn suggests that state parties think that resource rents that can be drawn from the oceans are high relative to dispute costs. Moreover, the recent mini-trend towards JDZs in East Asia suggests that state parties in the area have recently reassessed dispute costs as being higher than previously believed.

The Wave Equation for Stringed Instruments

An elementary derivation of the wave equation as applied to violin strings is given.