Growth and the ageing joneses
In: Reihe Ökonomie 230
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In: Reihe Ökonomie 230
In: Reihe Ökonomie 204
In: Reihe Ökonomie 208
This paper investigates how parametric reform in a pay-as-you-go pension system with a tax benefit link affects retirement incentives and work incentives of prime-age workers. We find that postponed retirement tends to harm incentives of prime-age workers in the presence of a tax benefit link, thereby creating a policy trade-off in stimulating aggregate labor supply. We show how several popular reform scenarios are geared either towards young or old workers, or, indeed, both groups under appropriate conditions. We also provide a sharp characterization of the excess burden of pension insurance and show how it depends on the behavioral supply elasticities on the extensive and intensive margins and the effective tax rates implicit in contribution rates. -- pension reform ; retirement ; hours worked ; tax benefit link ; actuarial adjustment ; excess burden
In: Review of International Economics, Band 22, Heft 1, S. 116-130
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We analyze the role of government intertemporal budget policies in a growing open economy including nominal assets in the presence of an upward sloping supply of debt. This introduces transitional dynamics that influence the effects of government policy instruments on the long term fiscal liability. In particular, shifts in capital income taxes can lead to dynamic scoring effects through the evolution of foreign debt. We show that a combination of tax-cum-expenditure, or government expenditure alone can balance the long term government budget constraint. However, for certain combinations of parameter values, the capital income tax alone cannot balance the intertemporal budget.
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In: Review of International Economics, Band 22(1), Heft 116-130
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Working paper
In: CESifo Working Paper No. 2057
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This paper analyzes the role of nominal assets in ranking intertemporal budget policies in a growing open economy. The budget policies are ranked in terms of the public's intertemporal stock of tax liabilities. Our main result is that, in a small open economy, the valuation of private and public assets is in terms of the exogenous foreign price level under purchasing power parity. This constraint limits the scope of government to influence the real value of assets using fiscal and monetary policy shocks.
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In: Journal of economic dynamics & control, Band 35, Heft 9, S. 1387-1392
ISSN: 0165-1889
In: Journal of economic dynamics & control, Band 33, Heft 1, S. 53-64
ISSN: 0165-1889
In: Journal of economics, Band 93, Heft 2, S. 109-144
ISSN: 1617-7134
In: Journal of economics, Band 72, Heft 3, S. 241-262
ISSN: 1617-7134
In: The economic journal: the journal of the Royal Economic Society, Band 108, Heft 447, S. 399-413
ISSN: 1468-0297
This paper analyzes the impact of public investment on the dynamics of private capital formation in an intertemporal optimizing market-clearing framework. The key feature characterizing the analysis is that the public good is treated as a durable capital good, subject to congestion. We show how in the presence of congestion the effect of government investment on private capital formation involves a tradeoff between the degree of substitution between private and public capital in production and the degree of congestion. Both lump-sum and distortionary tax financing are considered, with this tradeoff being tightened in the latter case.
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