SIRE
Not a member yet
655 research outputs found
Sort by
Constructing a Social Accounting Matrix for Libya
Get PDFIn this paper a Social Accounting Matrix is constructed for Libya for the year 2000.
The procedure was divided into three steps. First, a macro SAM was constructed to
consistently capture and represent the macroeconomic framework of the Libyan
economy in 2000. Second, that macro SAM was disaggregated into a micro SAM incorporating the accounts for individual activities, primary factors and the main economic institutions. But the SAM obtained in this way was not balanced. So in thE final step we balanced the SAM using a cross-entropy procedure in General Algebraic Modelling System (GAMS). This SAM integrates national income, inputoutput, flow-of-funds, and foreign trade statistics into a comprehensive and consistent dataset.
The lack of coherent time series data for Libya is a serious obstacle for applied
research that uses econometric analysis. Our main intension in constructing this SAM has been one of providing benchmark data for economy-wide analysis using CGE modelling for Libya
Hawtreyan “Credit Deadlock” or Keynesian “Liquidity Trap”? Lessons for Japan from the Great Depression
Get PDFThis paper outlines the ideas of Ralph Hawtrey and Lauchlin Currie on the need for monetised fiscal deficit spending in 1930s USA to combat the deep depression into which the economy had been allowed to sink. In such exceptional circumstances of “credit deadlock” in which banks were afraid to lend and households and business afraid to borrow, the deadlock could best be broken through the spending of new money into circulation via large fiscal deficits. This complementarity of fiscal and monetary policy was shown to be essential, and as such indicates the potential power of monetary policy – in contrast to the Keynesian “liquidity trap” view that it is powerless This lesson was not learned by the Japanese authorities in their response to the asset price collapse of 1991-92, resulting in a lost decade as ballooning fiscal deficits were neutralised throughout the 1990s by unhelpfully tight monetary policy with the Bank of Japan refusing to monetise the deficits
An Archival Case Study: Revisiting The Life and Political Economy of Lauchlin Currie
Get PDFThis paper forms part of a wider project to show the significance of archival material on distinguished economists, in this case Lauchlin Currie (1902-93), who studied and taught at Harvard before entering government service at the US Treasury and Federal Reserve Board as the intellectual leader of Roosevelt’s New Deal, 1934-39, as FDR’s White House economic adviser in peace and war, 1939-45, and as a post-war development economist. It discusses the uses made of the written and oral material available when the author was writing his intellectual biography of Currie (Duke University Press 1990) while Currie was still alive, and the significance of the material that has come to light after Currie’s death
Avoidance Policies – A New Conceptual Framework
Get PDFThis paper develops a general theoretical framework within which a heterogeneous group
taxpayers confront a market that supplies a variety of schemes for reducing tax liability, and uses this framework to explore the impact of a wide range of anti-avoidance policies.
Schemes differ in their legal effectiveness and hence in the risks to which they expose
taxpayers - risks which go beyond the risk of audit considered in the conventional literature on evasion. Given the individual taxpayer’s circumstances, the prices charged for the schemes and the policy environment, the model predicts (i) whether or not any given taxpayer will acquire a scheme, and (ii) if they do so, which type of scheme they will acquire.
The paper then analyses how these decisions, and hence the tax gap, are influenced by four
generic types of policy:
Disclosure – earlier information leading to faster closure of loopholes;
Penalties – introduction of penalties for failed avoidance;
Policy Design – fundamental policy changes that design out opportunities for avoidance;
Product Register - the introduction of GAARs or mini-GAARs that give greater clarity
about how different types of scheme will be treated.
The paper shows that when considering the indirect/behavioural effects of policies on the tax gap it is important to recognise that these operate on two different margins. First policies will have deterrence effects – their impact on the quantum of taxpayers choosing to acquire different types schemes as distinct to acquiring no scheme at all. There will be a range of such deterrence effects reflecting the range of schemes available in the market. But secondly, since different schemes generate different tax gaps, policies will also have switching effects as they induce taxpayers who previously acquired one type of scheme to
acquire another. The first three types of policy generate positive deterrence effects but differ in the switching effects they produce. The fourth type of policy produces mixed deterrence effects
Analysing the impact of public capital stock using the NEG wage equation: a panel data approach
Get PDFThis paper examines the relationship between the level of public infrastructure
and the level of productivity using panel data for the Spanish provinces over the period 1984-2004, a period which is particularly relevant due to the substantial changes occurring in the Spanish economy at that time. The underlying model used for the data analysis is based on the wage equation, which is one of a handful of simultaneous
equations which when satisfied correspond to the short-run equilibrium of New
Economic Geography theory. This is estimated using a spatial panel model with fixed
time and province effects, so that unmodelled space and time constant sources of
heterogeneity are eliminated. The model assumes that productivity depends on the level of educational attainment and the public capital stock endowment of each province. The results show that although changes in productivity are positively associated with changes in public investment within the same province, there is a negative relationship between
productivity changes and changes in public investment in other regions
Climbing to the top? Foreign Direct Investment and Property Rights.
Get PDFThis paper operates at the interface of the literature on the impact of foreign direct investment (FDI) on host countries, and the literature on the determinants of institutional quality. We argue that FDI contributes to economic development by improving institutional quality in the
host country and we attempt to test this proposition using a large panel data set of 70 developing countries during the period 1981 and 2005, and we show that FDI inflows have a positive and highly significant impact on property rights. The result appears to be very robust and is and not affected by model specification, different control variables, or a particular
estimation technique. As far as we are aware this is the first paper to empirically test the FDI – property rights linkage
3-Regime symmetric STAR modeling and exchange rate reversion
Get PDFThe breakdown of the Bretton Woods system and the adoption of generalized
oating exchange rates ushered in a new era of exchange rate volatility and uncer-
tainty. This increased volatility lead economists to search for economic models able
to describe observed exchange rate behavior. In the present paper we propose more
general STAR transition functions which encompass both threshold nonlinearity and
asymmetric e¤ects. Our framework allows for a gradual adjustment from one regime
to another, and considers threshold e¤ects by encompassing other existing models,
such as TAR models. We apply our methodology to three di¤erent exchange rate
data-sets, one for developing countries, and o¢ cial nominal exchange rates, the sec-
ond emerging market economies using black market exchange rates and the third
for OECD economies
Electoral Uncertainty and the Deficit Bias in a New Keynesian Economy
Get PDFRecent attempts to incorporate optimal fiscal policy into New Keynesian models subject to nominal inertia, have tended to assume that policy makers are benevolent and have access to a commitment technology. A separate literature, on the New Political Economy, has focused on real economies where
there is strategic use of policy instruments in a world of political conflict. In
this paper we combine these literatures and assume that policy is set in a New
Keynesian economy by one of two policy makers facing electoral uncertainty (in
terms of infrequent elections and an endogenous voting mechanism). The policy
makers generally share the social welfare function, but differ in their preferences
over fiscal expenditure (in its size and/or composition). Given the environment,
policy shall be realistically constrained to be time-consistent. In a sticky-price
economy, such heterogeneity gives rise to the possibility of one policy maker
utilising (nominal) debt strategically to tie the hands of the other party, and
influence the outcome of any future elections. This can give rise to a deficit bias, implying a sub-optimally high level of steady-state debt, and can also imply a
sub-optimal response to shocks. The steady-state distortions and inflation bias
this generates, combined with the volatility induced by the electoral cycle in a
sticky-price environment, can significantl
Exchange rate forecasters’ performance: evidence of skill?
Get PDFThis paper sheds new light on a long-standing puzzle in the international finance literature, namely, that exchange rate expectations appear inaccurate and even irrational. We find for a comprehensive dataset that individual forecasters’ performance is skill-based. ‘Superior’ forecasters show consistent ability as their forecasting success holds across currencies. They seem to possess knowledge on the role of fundamentals in explaining exchange rate behavior, as indicated by better interest rate forecasts. Superior forecasters are more experienced than the median forecaster and have fewer personnel responsibilities. Accordingly, foreign exchange markets may function in less puzzling and irrational ways than is often thought
Testing the TASP: An Experimental Investigation of Learning in Games with Unstable Equilibria
Get PDFWe report experiments designed to test between Nash equilibria that are stable and unstable under learning. The “TASP” (Time Average of the Shapley Polygon) gives a precise prediction about what happens when there is divergence from equilibrium under fictitious play like learning processes. We use two 4 x 4 games each with a unique mixed Nash equilibrium; one is stable and one is unstable under learning. Both games are versions of Rock-Paper-Scissors with
the addition of a fourth strategy, Dumb. Nash equilibrium places a weight of 1/2 on Dumb in both games, but the TASP places no weight on Dumb when the equilibrium is unstable. We also vary the level of monetary payoffs with higher payoffs predicted to increase instability. We find that the high payoff unstable treatment differs from the others. Frequency of Dumb is lower and play is further from Nash than in the other treatments. That is, we find support for the comparative statics prediction of learning theory, although the frequency of Dumb is
substantially greater than zero in the unstable treatments