The Optimal Distribution of the Tax Burden over the Business Cycle

This paper analyses optimal income taxes over the business cycle under a balanced-budget restriction, for low, middle and high income households. A model incorporating capital-skill complementarity in production and differential access to capital and labour markets is developed to capture the cyclical characteristics of the US economy, as well as the empirical observations on wage (skill premium) and wealth inequality. We .nd that the tax rate for high income agents is optimally the least volatile and the tax rate for low income agents the least countercyclical. In contrast, the path of optimal taxes for the middle income group is found to be very volatile and counter-cyclical. We further find that the optimal response to output-enhancing capital equipment technology and spending cuts is to increase the progressivity of income taxes. Finally, in response to positive TFP shocks, taxation becomes more progressive after about two years.

On the cost of rent-seeking by government bureaucrats in a Real-Business-Cycle framework

This paper studies the wasteful e ffect of bureaucracy on the economy by addressing the link between rent-seeking behavior of government bureaucrats and the public sector wage bill, which is taken to represent the rent component. In particular, public o fficials are modeled as individuals competing for a larger share of those public funds. The rent-seeking extraction technology in the government administration is modeled as in Murphy et al. (1991) and incorporated in an otherwise standard Real-Business-Cycle (RBC) framework with public sector. The model is calibrated to German data for the period 1970-2007. The main fi ndings are: (i) Due to the existence of a signi ficant public sector wage premium and the high public sector employment, a substantial amount of working time is spent rent-seeking, which in turn leads to signifi cant losses in terms of output; (ii) The measures for the rent-seeking cost obtained from the model for the major EU countries are highly-correlated to indices of bureaucratic ineffi ciency; (iii) Under the optimal scal policy regime,steady-state rent-seeking is smaller relative to the exogenous policy case, as the government chooses a higher public wage premium, but sets a much lower public employment, thus achieving a decrease in rent-seeking.

Currency Forecast Errors at Times of Low Interest Rates: Evidence from Survey Data on the Yen/Dollar Exchange Rate

Using survey expectations data and Markov-switching models, this paper evaluates the characteristics and evolution of investors' forecast errors about the yen/dollar exchange rate. Since our model is derived from the uncovered interest rate parity (UIRP) condition and our data cover a period of low interest rates, this study is also related to the forward premium puzzle and the currency carry trade strategy. We obtain the following results. First, with the same forecast horizon, exchange rate forecasts are homogeneous among different industry types, but within the same industry, exchange rate forecasts differ if the forecast time horizon is different. In particular, investors tend to undervalue the future exchange rate for long term forecast horizons; however, in the short run they tend to overvalue the future exchange rate. Second, while forecast errors are found to be partly driven by interest rate spreads, evidence against the UIRP is provided regardless of the forecasting time horizon; the forward premium puzzle becomes more significant in shorter term forecasting errors. Consistent with this finding, our coefficients on interest rate spreads provide indirect evidence of the yen carry trade over only a short term forecast horizon. Furthermore, the carry trade seems to be active when there is a clear indication that the interest rate will be low in the future.

Tax smoothing in a business cycle model with capital-skill complementarity

This paper undertakes a normative investigation of the quantitative properties of optimal tax smoothing in a business cycle model with state contingent debt, capital-skill complementarity, endogenous skill formation and stochastic shocks to public consumption as well as total factor and capital equipment productivity. Our main finding is that an empirically relevant restriction which does not allow the relative supply of skilled labour to adjust in response to aggregate shocks, signi cantly changes the cyclical properties of optimal labour taxes. Under a restricted relative skill supply, the government fi nds it optimal to adjust labour income tax rates so that the average net returns to skilled and unskilled labour hours exhibit the same dynamic behaviour as under fl exible skill supply.

Overtime Working and Contract Efficiency

We present a wage-hours contract designed to minimize costly turnover given investments in specific training combined with firm and worker information asymmetries. It may be optimal for the parties to work ‘long hours’ remunerated at premium rates for guaranteed overtime hours. Based on British plant and machine operatives, we test three predictions. First, trained workers with longer tenure are more likely to work overtime. Second, hourly overtime pay exceeds the value of marginal product while the basic hourly wage is less than the value of marginal product. Third, the basic hourly wage is negatively related to the overtime premium.

Optimal progressive taxation in a model with endogenous skill supply.

This paper examines whether efficiency considerations require that optimal labour income taxation is progressive or regressive in a model with skill heterogeneity, endogenous skill acquisition and a production sector with capital-skill complementarity. We find that wage inequality driven by the resource requirements of skill-creation implies progressive labour income taxation in the steady-state as well as along the transition path from the exogenous to optimal policy steady-state. We find that these results are explained by a lower labour supply elasticity for skilled versus unskilled labour which results from the introduction of the skill acquisition technology.

Fiscal multipliers in a two-sector search and matching model

This paper evaluates the effects of policy interventions on sectoral labour markets and the aggregate economy in a business cycle model with search and matching frictions. We extend the canonical model by including capital-skill complementarity in production, labour markets with skilled and unskilled workers and on-the-job-learning (OJL) within and across skill types. We first find that, the model does a good job at matching the cyclical properties of sectoral employment and the wage-skill premium. We next find that vacancy subsidies for skilled and unskilled jobs lead to output multipliers which are greater than unity with OJL and less than unity without OJL. In contrast, the positive output effects from cutting skilled and unskilled income taxes are close to zero. Finally, we find that the sectoral and aggregate effects of vacancy subsidies do not depend on whether they are financed via public debt or distorting taxes.

How to use the standard model with own data?

In this work discuss the use of the standard model for the calculation of the solvency capital requirement (SCR) when the company aims to use the specific parameters of the model on the basis of the experience of its portfolio. In particular, this analysis focuses on the formula presented in the latest quantitative impact study (2010 CEIOPS) for non-life underwriting premium and reserve risk. One of the keys of the standard model for premium and reserves risk is the correlation matrix between lines of business. In this work we present how the correlation matrix between lines of business could be estimated from a quantitative perspective, as well as the possibility of using a credibility model for the estimation of the matrix of correlation between lines of business that merge qualitative and quantitative perspective.

Price policies and Price dispersion in the private healthcare insurance industry: The Catalan case

We present an overlapping generations model that explains price dispersion among Catalonian healthcare insurance firms. The model shows that firms with different premium policies can coexist. Furthermore, if interest rates are low, firms that apply equal premium to all insureds can charge higher average prices than insurers that set premiums according to the risk of insured. Economic theory, health insurance, health economics.

PHA urges 'freshers' to be smart and know their alcohol limits

As 'fresher's week' commences, the Public Health Agency is encouraging students across Northern Ireland to avoid binge drinking and to know their limits if they do choose to drink alcohol.Enjoying new freedoms, at college or university, means taking care of yourself and others and, if you choose to drink, staying within safe alcohol limits. Owen O'Neill, PHA Health and Social Wellbeing Improvement Manager for drugs and alcohol, said: "Some young people may drink more when they leave home, or join their friends in college or university for the first time. They might think that, as young people, they don't have to take care with alcohol, but staying within the safe drinking limits is important for everyone who drinks. Excessive and binge drinking can have lasting effects on health, such as damage to the liver, heart, brain and stomach. Drinking too much can also increase the risk of accidents and antisocial behaviour as well as sexually transmitted infections and unplanned pregnancy"."We would also strongly advise against drinking games. Although they are regarded as a 'bit of fun', in reality they can be very dangerous. As an extreme form of binge drinking, where large quantities of alcohol are consumed in a very short time, drinking games can result in alcohol poisoning, leading to brain damage, coma or death. The PHA encourages students to enjoy their new student life, but urges them to be aware of their alcohol intake and drink responsibly, especially throughout fresher's week, with the many cheap drink promotions currently available."Daily alcohol limits are recommended by the government in order to avoid the risks of excessive and binge drinking in any one session. These are:Men: No more than 3 to 4 units of alcohol a day and no more than 21 units over the course of the week.Women: No more than 2 to 3 units of alcohol a day and no more than 14 units over the course of the week.Examples of units:Can of extra strong lager - 4 unitsBottle of lager - 1.5 unitsPint of standard lager - 2.5 unitsPint of premium larger - 3 unitsSmall pub bottle of wine - 2.25 units70cl bottle of wine - 7 to 10 unitsStandard 275ml of alcopops - 1.5 to 1.8 units70cl bottle of alcopops - 3.75 to 4.5 unitsPub measure of spirits - 1.5 unitsPint of cider - 3 unitsPint of stout - 2.5 unitsIf you do choose to drink alcohol:DON'T:Ever drink and driveDrink on an empty stomachMix alcohol with other drugsDrink in rounds as this may speed up your drinkingLeave your drinks unattendedDO:Take sips rather than gulpsAlternate each alcoholic drink with a non alcoholic drink e.g. water or a soft drinkSet yourself a limit and try to stick to it (refer to daily alcohol limits) Take frequent breaks from drinking to give your body time to recoverTell friends and family where you are going and who you will be withRemember, that for each unit you drink over the daily limit, the risk to your health increases. It's important to spread the units throughout the week - you can't 'save up' your units for the weekend or your holiday. It is also important to drink plenty of water, ideally matching the amount of alcohol you have consumed.So students make smart choices this term - drink sensibly and know your limits!For further information on sensible drinking and alcohol units visit the Public Health Agency's website www.knowyourlimits.info

PHA reinforce sensible drinking in Alcohol Awareness Week

Recent health figures show that 20% of adults surveyed admitted to drinking over the weekly alcohol limits (1)so the Public Health Agency is using Alcohol Awareness Week (14-20th November) to reinforce the importance of drinking sensibly and staying within safe alcohol limits.Government guidelines on safe drinking are 21 units per week for males and 14 units per week for females. Staying within these limits is important as excessive and binge drinking can lead, in the short term, to increased risk of accidents, antisocial behaviour, impact on relationships, unplanned pregnancy. Longer term it can damage the liver, heart, brain and stomach, not to mention the other human costs, and costs to the economy and society as a whole.Owen O'Neill, PHA Health and Social Wellbeing Improvement Manager and Drugs and Alcohol Lead, said: "The Department of Health, Social Services and Public Safety's drinking limits are in place to encourage the public to develop safe and sensible drinking habits. However, these recent figures highlight that not everyone is adhering to these limits. It is crucial that those who do decide to have a drink do so in moderation and stick to the recommended limits to prevent any long or short term damages".The message is clear, if you drink, remember to be smart and enjoy alcohol within safe limits. People should follow the recommended daily alcohol intake. These are:Men: No more than 3 to 4 units of alcohol a day and no more than 21 units over the course of the week.Women: No more than 2 to 3 units of alcohol a day and no more than 14 units over the course of the week.Examples of units:Can of extra strong lager - 4 unitsBottle of lager - 1.5 unitsPint of standard lager - 2.5 unitsPint of premium larger - 3 unitsSmall pub bottle of wine - 2.25 unitsPub measure of spirits - 1.5 unitsPint of cider - 3 unitsPint of stout - 2.5 units. Remember, that for each unit you drink over the daily limit, the risk to your health increases. It's important to spread the units throughout the week - you can't 'save up' your units for the weekend or an upcoming holiday. It is also important to drink plenty of water, ideally matching the amount of alcohol you have consumed.For further information on sensible drinking and alcohol units visit the Public Health Agency's website www.knowyourlimits.infoReference(1) Health Survey Northern Ireland: first results from the 2010/2011 survey (2011) DHSSPS, http://dhsspsni.giv/index/stats_research/stats-public-health.htm

BCN-Routing : càlcul web de rutes amb pgRouting, OpenStreetMaps i OpenLayers

Es presenta un sistema acurat de càlcul web d'itineraris mínims (per a vianants i per a vehicles) entre dos punts de la ciutat de Barcelona, un dels quals es triat per l'usuari directament a sobre un mapa i l'altre, alternativament, a sobre el mateix mapa o bé a sobre una llista de selecció de les principals atraccions turístiques de Barcelona.El sistema es troba implementat per medi de MapServer (1) com a servidor, OpenLayers (2) per a la interfície d'usuari, una base de dades PostrgreSQL (3)/PostGIS (4) que recull dades d'OpenStreetMaps (5) per a la navegació i dades introduïdes manualment, per a la llista de selecció d'atraccions turístiques. Per al càlcul d'itineraris es fa servir, pgRouting (6) alhora que s'accedeix a la cartografia de CartoCiudad (7) per a mostrar un mapa de base i opcionalment els noms dels carrers i punts d'interès a partir de les capes FondoUrbano, Vial i Topónimo del servidor WMS de CartoCiudad.Tot el sistema corre a sobre Windows 7 Home Premium (8).Així mateix es presenten quatre noves funcions i un tipus definit per l'usuari de PostgreSQL per al càlcul acurat d'itineraris mínims i l'estudi teòric que justifica la seva bondat.

Efeitos da precificação, da diferenciação e da oferta de valor no desempenho de marcas em contextos competitivos

As marcas têm desempenhos distintos em participação de mercado e margem de lucro, que podem ser estimulados se elas estiverem competindo com poucos concorrentes ou desestimulados se estiverem competindo com muitos concorrentes. No varejo, as marcas próprias de supermercado e as de fabricantes têm desempenhos dentro desses contextos competitivos. Neste estudo, investigaram-se os efeitos das estratégias de marketing utilizadas pelos varejistas no desempenho de marcas de supermercado e de fabricantes em níveis distintos de contextos competitivos. Foram utilizados dados secundários de precificação, diferenciação, margem de lucro e participação de mercado de marcas provenientes de uma rede de supermercado e, complementarmente, via survey, coletados dados sobre o valor percebido (familiaridade e percepção de qualidade) de cada uma delas junto a consumidores no supermercado. A amostra foi composta por 111 marcas de 15 produtos comercializados ao longo de 234 dias. Os resultados da regressão demonstraram que estratégias de marketing (precificação premium, variação do preço promocional, nível de diferenciação e oferta de opções com diferentes valores) exercem efeitos sobre o desempenho (participação de mercado e margem de lucro), mas são diferentes para marcas de supermercado e para as de fabricantes em contextos competitivos distintos. Este trabalho auxilia os gestores de marcas na identificação dos contextos para executarem as estratégias supracitadas.

Farm-Level Analysis of Risk Management Proposals, March 2000

This paper presents a detailed report of the representative farm analysis (summarized in FAPRI Policy Working Paper #01-00). At the request of several members of the Committee on Agriculture, Nutrition, and Forestry of the U.S. Senate, we have continued to analyze the impacts of the Farmers’ Risk Management Act of 1999 (S. 1666) and the Risk Management for the 21st Century Act (S. 1580). Earlier analysis reported in FAPRI Policy Working Paper #04-99 concentrated on the aggregate net farm income and government outlay impacts. The representative farm analysis is conducted for several types of farms, including both irrigated and non-irrigated cotton farms in Tom Green County, Texas; dryland wheat farms in Morton County, North Dakota and Sumner County, Kansas; and a corn farm in Webster County, Iowa. We consider additional factors that may shed light on the differential impacts of the two plans. 1. Farm-level income impacts under alternative weather scenarios. 2. Additional indirect impacts, such as a change in ability to obtain financing. 3. Implications of within-year price shocks. Our results indicate that farmers who buy crop insurance will increase their coverage levels under S. 1580. Farmers with high yield risk find that the 65 percent coverage level maximizes expected returns, but some who feel that they obtain other benefits from higher coverage will find that the S. 1580 subsidy schedule significantly lowers the cost of obtaining the additional coverage. Farmers with lower yield risk find that the increased indemnities from additional coverage will more than offset the increase in producer premium. In addition, because S. 1580 extends its increased premium subsidy percentages to revenue insurance products, farmers will have an increased incentive to buy revenue insurance. Differences in the ancillary benefits from crop insurance under the baseline and S. 1580 would be driven by the increase in insurance participation and buy-up. Given the same levels of insurance participation and buy-up, the ancillary benefits under the two scenarios would be the same.

Is there a wage penalty for horizontal and vertical mismatch?

This paper studies how the horizontal and vertical mismatches in the labor market affect wage. We do so by taking into account that by choosing a job, wage and mismatches are simultaneously determined. The Seemingly Unrelated Equations model also allows us to control for any omitted variable that could cause biased estimators. We use REFLEX data for Spain. Results reveal that in most cases being horizontally matched has a wage premium and being over-educated does not affect wage. Results suggest that the modeling strategy successfully accounts for some omitted variable that affects simultaneously the probability of being horizontally matched and the wage. This could explain the existence of a wage penalty for over-educated workers when the omitted variable issue is not dealt with.