Turkish Economic Review
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Venezuela’s tragic meltdown
Full text linkAbstract. Mr. Chairman, thank you for this opportunity to express my views on “Venezuela’s Tragic Meltdown.” A great deal of the commentary on the topic is polemical, and more-or-less political and ideological self-justifications of one sort or another. In consequence, the discourse is often confused and confusing. In an attempt to bring some clarity to the topic, I will focus on the one necessary condition that must be satisfied before the Venezuelan economy can be turned around. Inflation must be stopped before stability can be established. Stability might not be everything, but everything is nothing without stability.Keywords. Currency board, dollarization, monetary reform, Venezuela.JEL. E50; E42; P21
A mixed-method approach study in Brazil Congress: The vote on matters of high degree of technical complexity
Full text linkAbstract. This article delves into the intricate relationship between legislative power, and public policy efficiency, exploring their impact on the formulation and implementation of public policies in Brazil. The study adopts a mixed-method approach, combining descriptive statistics and qualitative content analysis, to shed light on this less-explored aspect of legislative functioning, investigating whether the Legislative Power in Brazil uses its competence to vote on matters of a specialized nature or delegates the rule to the Executive Power. The legislative process analyzed in this research is one of a Provisional Measure. This process is the most appropriate because it involves both houses of Congress and begins with the Executive branch enacting the rule. Descriptive statistics show correlations between key variables, while qualitative content analysis revealed a preference for the Legislative Power to regulate matters of technical nature rather than delegating them to specialized bodies. The study's findings underscore the importance of public trust in government actions, as both the Executive and Legislative branches need to prioritize transparency, accountability, and responsiveness to maintain public confidence in the regulatory process. Policymakers must carefully assess the context and objectives of each regulatory proposal to make informed decisions about delegation that best serve the public's interests and the government's effective functioning. Keywords. Congress; Competence; Technical expertise; Political representation; Mixed-method approach; Descriptive statistics; Qualitative content analysis; Brazil.JEL. H77, K290
Analyzing female labor force participation in Afghanistan: Panel data approach
Full text linkAbstract. In comparison to other countries, female labor force participation in Afghanistan is the lowest. Afghanistan currently has the lowest labor force participation rate in the world, at 16%. According to the 2015 UN Gender Inequality Index, women own only 5% of Afghan businesses. The aim of this paper is to examine female labor force participation in Afghanistan. This is the first study of women's labor force participation in Afghanistan. Data were obtained from a variety of official sources, including the Central and Statistical Organization of Afghanistan, the World Bank, the Ministry of Labor, and the Ministry of Women's Affairs. The dataset covers 20 provinces in the different time periods from 2016 to 2020. In a panel data approach, we used a fixed effects model and a generalized method of moments (GMM) to analyze the effect of minimum wage, female education, female age, mother age, household size, father's education level, and female labor skills (work experience) on female labor force participation. Our findings show that the minimum wage, female education, female age, father's education level, and female work skills (work experience) all have significant and positive effects on female labor force participation. However, the mother's age has no effect on women's labor-force participation. There is a strong, statistically significant, and negative relationship between household size and female labor force participation. These findings imply that the Afghan government should consider using minimum wages, education, working age, and work experience as policy tools to increase female labor force participation. Using a panel data approach, this study contributes to the literature in Afghanistan.Keywords. Female labor force; Household size; Education; Minimum wage; Labor market; Panel data, Afghanistan.JEL. J20; J21; P21
A survey of Venezuelan public opinion on the replacement of the Bolivar with either the U.S. dollar or the central bank of Venezuela with a currency board
Full text linkAbstract. This paper describes the methodology and presents the results of a Datincorp survey on Venezuela’s economic crisis. The survey was carried out in March 2017. A majority of Venezuelans do not trust the Central Bank of Venezuela, and believe that immediate change is necessary. A majority of Venezuelans also indicate that the implementation of dollarization or an orthodox currency board are not only the most desirable solutions in theory, but are also highly supported by Venezuelan public opinion.Keywords. Currency board, dollarization, monetary reform, Venezuela.JEL. E50; E42; P21
Subsistence-(Threshold) payoff and truncated risk preferences
Full text linkAbstract. A measure of aversion to a risk akin to the risk premium is the required payoff truncation – a probability level, or a point of the distribution range - of the – null mean - risk distribution that allows an expected utility equal to the deterministic level. For a small risk – a noise of null expected value - added to the argument of an utility function, it is straight-forward to show that – for a risk-averse individual - such subsistence probability equals the conventional risk-premium over the symmetric of the worst possible outcome. However, both measures do not take into account aversion (or proneness) to risk in the utility distribution itself – they apply to expected utility maximizers. Maxmin behaviour and quantile preferences, applicable in the presence of uncertainty (or non-cooperative opponents) rather than risk, can be suggested to circumvent the problem. An alternative theory – constrained expected utility - relies on the use the expected utility over the upper truncated distribution (lower - or doubly truncated - in case of risk-loving behavior) at a given (individual specific) truncation point, or probability level. Then, a conventionally defined risk-premium weighs both the truncation bias and risk dispersion. Such distinction also applies if preference truncation – or rather, “trimming” - is (instead) accompanied by a switch of probability mass to tail “focal” points. Then, if the latter are sufficiently extreme, the effect on attitude towards risk may be reversed relative to standard preference truncation: lower trimming enhancing risk-aversion, upper one reducing it. Applications of truncated principles to mean-variance “utility” preferences – and risk-loving attitudes - were also briefly outlined. Illustrations for normal and uniform risks were often appended.Keywords. Subsistence-payoff; Non-expected utility theories; Constrained expected utility; Truncated preferences towards risk; Maxmin, maxmax; Trimmed preferences towards risk; Focal points; Mean – variance(-utility) preferences; “Trimmed” normal (with tail focal points) distribution; Triangular distribution; Triangular preferences.JEL. D81; C10; C16; C24; D11
Impact of reduction in corporate income tax on the South African economy: A CGE analysis
Full text linkAbstract. The aim of this study is to evaluate the effects of the drop in the Corporate Income Tax (CIT) from the current rate of 28% to 27% on the South African economy. The CGE model is considered appropriate to perform this research paper. This model is considered as the suitable model to evaluate the effects of change in CIT due to its usage over the years by the researchers and academics. One simulation is taken into consideration to evaluate the effects of the reduction in the CIT. The macroeconomic and investment closures were considered to observe the effects of the shock within the economy. In the closure, capital stock is allowed to change. Apart from the capital stock, the unskilled labour force is also allowed to change. The setting up of the CIT to 1% reduction results in a slight increase in the GDP, consumption, export and government revenue. Due to the fact that tax collection depends on the type of policy, economy and compliance revenue accomplishment, it was anticipated that private consumption should heighten as the CIT drop by 1%. In this respect, the improvement in the economy-wide productivity indicates that output has a significant impact on employment. The GDP increases slightly by 0.02164% which point out that the expansionary economy coupled with augmented export demand raises the demand for factors of production. CIT and tax assessment data constitutes the originality of this study, as acquiring reliable data on the CIT continues to be a non-trivial task in South Africa.Keywords. Corporate income tax (CIT); South African Revenue Service (SARS), CGE model.JEL. D58; H25
Personal income tax: Evidence from South Africa
Full text linkThe purpose of this paper was to assess the nationalities of Personal Income Tax (PIT) payers. This study used critical data from three sources – the South African census (Statistics South Africa (Stats SA)), tax assessments and IRP5s (South African Revenue Service (SARS)). IRP5 is a document that is known as an employee's tax certificate which outlines the employer/employee's related incomes, taxes, and related deductions at the end of each year. Statistical Analysis System (SAS) was used to analyse the data. This study found that 3.7 million assessed taxpayers were identified as contributors of PIT in 2011. Of these PIT payers, 3,681,325 (2,091,615 males and 1,589,710 females) were born in South Africa; 71,404 (46,986 males and 24,418 females) were not born in South Africa; and 37,486 (807 males, 339 females and 36,340 unknown) could not be identified as they had no South African identity document. Data used in this study originated from the results of a survey organized by Stats SA and tax assessments supplied by SARS specifically for the period 2001. The study attempted to shed light on the national identity of taxpayers working in South Africa. For comparison purposes, tax assessment data constitutes the originality of this study, as obtaining consistent estimates of earnings mobility remains a non-trivial task in the country.Keywords. Census; Tax assessment; IRP5; South Africa.JEL. C88; D31; H24
