Political competition and economic rivalry
In: Université catholique de Louvain, Faculté des sciences économiques, sociales et politiques N.S., 280
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In: Université catholique de Louvain, Faculté des sciences économiques, sociales et politiques N.S., 280
In: The B.E. Journal of Economic Analysis & Policy, Band 5, Heft 1
ISSN: 1935-1682
Abstract
In this paper, we analyze the trade war between two large countries when the trade policy is decided through majority voting. We show how the distributive aspect of trade policy interacts with the strategic aspect. It is shown that the voting equilibrium depends on the distribution of the factor endowment. If median voters in each country own relatively more (less) than the aggregate economy of the factor used intensively in the production of the imported good, the tariffs outcome of the trade war at home (abroad) is larger (lower) than the Johnson-Mayer one. This is to say that the strategic effects from trade policy can be isolated from the distributive aspect. Moreover, an increase of the median of the scarce/abundant factor distribution in one country leads to a larger tariff in this country and a lower tariff in the other. This implies that the political situation in one country affects the outcome of the trade war for both.
In: Topics in economic analysis & policy, Band 5, Heft 1
ISSN: 1538-0653
International audience ; In this article we propose a theoretical model to better comprehend the effect of gun laws on violent property crime. We assume that a violent encounter between a criminal and a victim is costly to both, and we uncover two types of equilibria: a pure strategy violent equilibrium and a mixed strategy equilibrium where the criminal is deterred with strictly positive probability. The effect of a relaxation of gun laws is shown to be conditional on both initial gun laws and on the relative improvement of the victims' defense capacity relative to the criminals' offense capacity. We uncover a potentially inverted U-shaped relationship between gun laws leniency and investments in violent activities which helps reconciling seemingly contradictory empirical findings. ; Dans cet article nous développons un modèle théorique permettant de mieux comprendre l'effet des lois sur le contrôle des armes à feu sur les crimes violents liés à l'appropriation de propriété privée. Nous supposons qu'une rencontre violente est coûteuse aussi bien pour un criminel que pour sa victime et nous identifions deux types d'équilibres : un équilibre violent en stratégie pure et un équilibre en stratégie mixte dans le cadre duquel le criminel est dissuadé avec une probabilité strictement positive. L'effet d'un assouplissement de la législation sur les armes à feu dépend du niveau des restrictions légales initiales en la matière, ainsi que du gain d'efficacité relatif de la victime et du criminel. Nous mettons au jour une possible relation en U-inversé entre la souplesse des lois sur les armes à feu et les investissements en activités violentes, ce qui permet de réconcilier des résultats empiriques antérieurs contradictoires.
BASE
International audience ; In this article we propose a theoretical model to better comprehend the effect of gun laws on violent property crime. We assume that a violent encounter between a criminal and a victim is costly to both, and we uncover two types of equilibria: a pure strategy violent equilibrium and a mixed strategy equilibrium where the criminal is deterred with strictly positive probability. The effect of a relaxation of gun laws is shown to be conditional on both initial gun laws and on the relative improvement of the victims' defense capacity relative to the criminals' offense capacity. We uncover a potentially inverted U-shaped relationship between gun laws leniency and investments in violent activities which helps reconciling seemingly contradictory empirical findings. ; Dans cet article nous développons un modèle théorique permettant de mieux comprendre l'effet des lois sur le contrôle des armes à feu sur les crimes violents liés à l'appropriation de propriété privée. Nous supposons qu'une rencontre violente est coûteuse aussi bien pour un criminel que pour sa victime et nous identifions deux types d'équilibres : un équilibre violent en stratégie pure et un équilibre en stratégie mixte dans le cadre duquel le criminel est dissuadé avec une probabilité strictement positive. L'effet d'un assouplissement de la législation sur les armes à feu dépend du niveau des restrictions légales initiales en la matière, ainsi que du gain d'efficacité relatif de la victime et du criminel. Nous mettons au jour une possible relation en U-inversé entre la souplesse des lois sur les armes à feu et les investissements en activités violentes, ce qui permet de réconcilier des résultats empiriques antérieurs contradictoires.
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SSRN
Working paper
Controlling for country fixed effects, there is a positive and statistically significant relationship between the degree of housing market regulation (HMR) and the strictness of employment protection legislation (EPL) in OECD countries. We provide a model in which HMR increases foreclosure costs in case of mortgage default, while EPL raises the administrative cost of dismissal. Owing to banks' lending behavior, individuals' demand for job protection increases with the cost of foreclosure. We use the model to discuss social housing and family insurance, the case for mortgage unemployment insurance, regulations on the use of fixed-term contracts, the impact of min down-payment policies, feed-back effects from HMR to EPL, and the failure of a 2006 French reform of the labor contracts.
BASE
Controlling for country fixed effects, there is a positive and statistically significant relationship between the degree of housing market regulation (HMR) and the strictness of employment protection legislation (EPL) in OECD countries. We provide a model in which HMR increases foreclosure costs in case of mortgage default, while EPL raises the administrative cost of dismissal. Owing to banks' lending behavior, individuals' demand for job protection increases with the cost of foreclosure. We use the model to discuss social housing and family insurance, the case for mortgage unemployment insurance, regulations on the use of fixed-term contracts, the impact of min down-payment policies, feed-back effects from HMR to EPL, and the failure of a 2006 French reform of the labor contracts.
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In: The Canadian journal of economics: the journal of the Canadian Economics Association = Revue canadienne d'économique, Band 41, Heft 2, S. 537-563
ISSN: 1540-5982
Abstract. We re‐examine the efficiency of observable and unobservable crime protection decisions with new results and insights. Observable protection is unambiguously associated with a negative externality. At the individual level, it reduces the crime effort, but its unit payoff remains unchanged. Conversely, unobservable protection reduces the unit payoff and has no effect on the crime effort exerted, though it deters crime globally. A decrease in the global crime payoff is detrimental to a victim if protection is observable, while it is beneficial when unobservable. While observable protection has a positive diversion effect, it has the opposite effect when unobservable.
In: Canadian Journal of Economics/Revue canadienne d'économique, Band 41, Heft 2, S. 537-563
SSRN
In: Journal of international economics, Band 56, Heft 2, S. 359-369
ISSN: 0022-1996
This paper addresses the issue of capital tax competition among an arbitrary number of countries. Countries are allowed to be asymmetric not only in their population endowment but also in their capital endowment per inhabitant. National governments tax capital and labor in order to finance a public good. Asymmetric capital taxation arises at equilibrium leading to a distortion on the international capital market. We provide conditions for the existence of a Nash Equilibrium. We fully characterize how equilibrium taxes and welfare levels depend upon countries population and capital endowments.
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This paper tackles the issue of international fiscal coordination in a world of integrated markets sovereign national governments. Taxation of mobile capital and immobile labor in order to finance a public good generates inefficient fiscal competition. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. We show that the introduction of a lower bound to the capital tax level is never preferred to fiscal competition by all countries while there always exists a combination of both a lower and an upper bound which is unanimously accepted.
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This paper addresses the issue of capital tax competition among an arbitrary number of countries. Countries are allowed to be asymmetric not only in their population endowment but also in their capital endowment per inhabitant. National governments tax capital and labor in order to finance a public good. Asymmetric capital taxation arises at equilibrium leading to a distortion on the international capital market. We provide conditions for the existence of a Nash Equilibrium. We fully characterize how equilibrium taxes and welfare levels depend upon countries population and capital endowments.
BASE
This paper tackles the issue of international fiscal coordination in a world of integrated markets sovereign national governments. Taxation of mobile capital and immobile labor in order to finance a public good generates inefficient fiscal competition. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. We show that the introduction of a lower bound to the capital tax level is never preferred to fiscal competition by all countries while there always exists a combination of both a lower and an upper bound which is unanimously accepted.
BASE