Pub Date : 2024-11-12DOI: 10.1016/j.euroecorev.2024.104891
Matthias Krapf , David Staubli
Drawing on panel variation across Swiss municipalities and cantons, we show that the elasticity of corporate taxable income is large in remote, non-central locations and insignificant in cities. In the full panel, we find that an increase in a jurisdiction’s corporate net-of-tax rate by 1% results in an increase in aggregate corporate income by around 3.5%. This effect becomes small and insignificant if we weight by initial tax base, which is large in cities, indicating that the overall tax base is inelastic. We explore margins of firms’ responsiveness, revenue effects, and implications for regional policy.
{"title":"Regional variations in corporate tax responsiveness: Evidence from Switzerland","authors":"Matthias Krapf , David Staubli","doi":"10.1016/j.euroecorev.2024.104891","DOIUrl":"10.1016/j.euroecorev.2024.104891","url":null,"abstract":"<div><div>Drawing on panel variation across Swiss municipalities and cantons, we show that the elasticity of corporate taxable income is large in remote, non-central locations and insignificant in cities. In the full panel, we find that an increase in a jurisdiction’s corporate net-of-tax rate by 1% results in an increase in aggregate corporate income by around 3.5%. This effect becomes small and insignificant if we weight by initial tax base, which is large in cities, indicating that the overall tax base is inelastic. We explore margins of firms’ responsiveness, revenue effects, and implications for regional policy.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2024-11-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142658697","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.euroecorev.2024.104888
Ohyun Kwon, Constantinos Syropoulos, Yoto V. Yotov
We identify the extraterritorial effects of trade sanctions and provide quantitative evidence that they are strong. Additionally, we show that the estimates of the primary effects may be significantly biased if the aforementioned extraterritorial effects are not taken into account. In the context of the U.S. embargo on Cuba, we confirm the presence of large and significant extraterritorial effects that vary across Cuba’s trade partners — most non-sanctioning states trade less with Cuba while its economic allies and states in close proximity to it trade more. Moreover, our complementary general-equilibrium analysis establishes that the U.S.’s sanctions have inflicted large welfare losses on Cuba but their effects on the rest of the world were small. As such, our analysis sheds new light on the significance (in terms of effectiveness) of extraterritorial sanctions and suggests that the motives for the opposition of third countries to such sanctions may be more political and legal than economic.
{"title":"Identifying and quantifying the extraterritorial effects of sanctions","authors":"Ohyun Kwon, Constantinos Syropoulos, Yoto V. Yotov","doi":"10.1016/j.euroecorev.2024.104888","DOIUrl":"10.1016/j.euroecorev.2024.104888","url":null,"abstract":"<div><div>We identify the extraterritorial effects of trade sanctions and provide quantitative evidence that they are strong. Additionally, we show that the estimates of the primary effects may be significantly biased if the aforementioned extraterritorial effects are not taken into account. In the context of the U.S. embargo on Cuba, we confirm the presence of large and significant extraterritorial effects that vary across Cuba’s trade partners — most non-sanctioning states trade less with Cuba while its economic allies and states in close proximity to it trade more. Moreover, our complementary general-equilibrium analysis establishes that the U.S.’s sanctions have inflicted large welfare losses on Cuba but their effects on the rest of the world were small. As such, our analysis sheds new light on the significance (in terms of effectiveness) of extraterritorial sanctions and suggests that the motives for the opposition of third countries to such sanctions may be more political and legal than economic.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142554647","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.euroecorev.2024.104890
Remo Nyffenegger
This paper analyzes the effects of a retail central bank digital currency (CBDC) on bank intermediation within a general equilibrium model and provides a quantitative assessment. In the model, banks offer both transaction and savings deposits. This allows to study how a CBDC’s impact varies based on its usage as a medium of exchange or as a savings vehicle. When a CBDC is used as a savings vehicle that competes with savings deposits, the level of disintermediation almost doubles compared to a scenario where the CBDC is used solely for transactions and competes only with transaction deposits.
{"title":"Central bank digital currency and bank intermediation: Medium of Exchange vs. Savings vehicle","authors":"Remo Nyffenegger","doi":"10.1016/j.euroecorev.2024.104890","DOIUrl":"10.1016/j.euroecorev.2024.104890","url":null,"abstract":"<div><div>This paper analyzes the effects of a retail central bank digital currency (CBDC) on bank intermediation within a general equilibrium model and provides a quantitative assessment. In the model, banks offer both transaction and savings deposits. This allows to study how a CBDC’s impact varies based on its usage as a medium of exchange or as a savings vehicle. When a CBDC is used as a savings vehicle that competes with savings deposits, the level of disintermediation almost doubles compared to a scenario where the CBDC is used solely for transactions and competes only with transaction deposits.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142658203","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.euroecorev.2024.104885
Loukas Balafoutas, Eugen Dimant, Simon Gächter, Erin Krupka
The collection of scientific contributions in this special issue explores the role of social norms in guiding collective behavior and the complexities of enforcing these norms in polarized contexts. It examines how norms, while fostering social cohesion, can also contribute to societal divisions, especially in politically charged environments. The included studies highlight three key areas: the enforcement of norms through mechanisms such as information dissemination and leadership; the breakdown of norms in polarized societies, where political affiliations and trust erosion can exacerbate discrimination; and the polarization of norms across political and generational divides, which can hinder collective action and deepen societal fragmentation. Together, these contributions provide valuable insights into how norms are maintained, challenged, or eroded in diverse settings, offering guidance for strengthening social cohesion in the face of contemporary global challenges.
{"title":"Social norms: Enforcement, breakdown & polarization","authors":"Loukas Balafoutas, Eugen Dimant, Simon Gächter, Erin Krupka","doi":"10.1016/j.euroecorev.2024.104885","DOIUrl":"10.1016/j.euroecorev.2024.104885","url":null,"abstract":"<div><div>The collection of scientific contributions in this special issue explores the role of social norms in guiding collective behavior and the complexities of enforcing these norms in polarized contexts. It examines how norms, while fostering social cohesion, can also contribute to societal divisions, especially in politically charged environments. The included studies highlight three key areas: the enforcement of norms through mechanisms such as information dissemination and leadership; the breakdown of norms in polarized societies, where political affiliations and trust erosion can exacerbate discrimination; and the polarization of norms across political and generational divides, which can hinder collective action and deepen societal fragmentation. Together, these contributions provide valuable insights into how norms are maintained, challenged, or eroded in diverse settings, offering guidance for strengthening social cohesion in the face of contemporary global challenges.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142658205","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.euroecorev.2024.104889
Francesca Barbiero , Lorenzo Burlon , Maria Dimou , Jan Toczynski
We assess whether dual interest rates – central bank funding at rates below the interest rates on reserves – influence the size and composition of bank credit. We measure exposure to the policy using daily reactions of bank funding costs to the announcement of the recalibration of the ECB’s TLTROs in April 2020. We then use the Euro area credit register to follow the evolution of bank lending conditions and risk-taking. We find that the measure had a strong positive effect on bank credit and, in contrast to a standard rate cut, was not accompanied by an increase in risk-taking.
{"title":"Targeted monetary policy, dual rates, and bank risk-taking","authors":"Francesca Barbiero , Lorenzo Burlon , Maria Dimou , Jan Toczynski","doi":"10.1016/j.euroecorev.2024.104889","DOIUrl":"10.1016/j.euroecorev.2024.104889","url":null,"abstract":"<div><div>We assess whether dual interest rates – central bank funding at rates below the interest rates on reserves – influence the size and composition of bank credit. We measure exposure to the policy using daily reactions of bank funding costs to the announcement of the recalibration of the ECB’s TLTROs in April 2020. We then use the Euro area credit register to follow the evolution of bank lending conditions and risk-taking. We find that the measure had a strong positive effect on bank credit and, in contrast to a standard rate cut, was not accompanied by an increase in risk-taking.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142561232","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.euroecorev.2024.104892
Julian Matthes, David Piazolo
We study competition between two groups of individuals with team affiliations, where each group solves a coopetition problem to outperform the other group. Our analysis suggests the presence of a strategic benefit of diversification that goes beyond merely reducing outcome uncertainty. We outline applications in industrial and workplace organization and provide a detailed model of road cycling races, which naturally feature this strategic setup. We find that asymmetric groups tend to cooperate better. Also, having team members in two competing groups is beneficial for a team, as it increases free-riding opportunities in both groups. By analyzing data from over 40 seasons of professional road cycling races, we find empirical evidence in favor of these results. In particular, having a teammate in a group behind positively impacts win probability.
{"title":"Don’t put all your legs in one basket: Theory and evidence on coopetition in road cycling","authors":"Julian Matthes, David Piazolo","doi":"10.1016/j.euroecorev.2024.104892","DOIUrl":"10.1016/j.euroecorev.2024.104892","url":null,"abstract":"<div><div>We study competition between two groups of individuals with team affiliations, where each group solves a coopetition problem to outperform the other group. Our analysis suggests the presence of a strategic benefit of diversification that goes beyond merely reducing outcome uncertainty. We outline applications in industrial and workplace organization and provide a detailed model of road cycling races, which naturally feature this strategic setup. We find that asymmetric groups tend to cooperate better. Also, having team members in two competing groups is beneficial for a team, as it increases free-riding opportunities in both groups. By analyzing data from over 40 seasons of professional road cycling races, we find empirical evidence in favor of these results. In particular, having a teammate in a group behind positively impacts win probability.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142657861","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.euroecorev.2024.104886
Jason Shachat , Matthew J. Walker , Lijia Wei
A primary objective of creating competition among suppliers is the procurement of higher quality goods and services at lower prices. When procuring non-standard goods, it is often difficult to write a complete specification of desired quality in the contract. Thus, payments to suppliers cannot be perfectly conditioned on the quality provided. We develop a simple model to distil several real-world features and illustrate how contract structure within price priority competition jointly affects bid aggression and incentives for the provision of surplus-enhancing quality. We implement the contingent payments as probabilistic. The selected supplier’s payment is, according to a fixed probability, either their bid or a quality contingent amount that depends on the bid and an exogenous norm for allocating social surplus. We use a lab experiment to show that there is a ‘Goldilocks’ region for high quality in which the probability of quality contingent payment is large enough to incentivize provision, but not so large as to induce overly aggressive bidding. This implementation only relies upon preferences for maximizing one’s own profit and the rationality of backward induction. An experimental finding not predicted in our setting is that suppliers earn positive economic profits inside the Goldilocks region, which can be explained by suppliers’ risk aversion. The results have implications for the effective design of contingent payments in contracts.
{"title":"Contingent payments in procurement interactions: Experimental evidence","authors":"Jason Shachat , Matthew J. Walker , Lijia Wei","doi":"10.1016/j.euroecorev.2024.104886","DOIUrl":"10.1016/j.euroecorev.2024.104886","url":null,"abstract":"<div><div>A primary objective of creating competition among suppliers is the procurement of higher quality goods and services at lower prices. When procuring non-standard goods, it is often difficult to write a complete specification of desired quality in the contract. Thus, payments to suppliers cannot be perfectly conditioned on the quality provided. We develop a simple model to distil several real-world features and illustrate how contract structure within price priority competition jointly affects bid aggression and incentives for the provision of surplus-enhancing quality. We implement the contingent payments as probabilistic. The selected supplier’s payment is, according to a fixed probability, either their bid or a quality contingent amount that depends on the bid and an exogenous norm for allocating social surplus. We use a lab experiment to show that there is a ‘Goldilocks’ region for high quality in which the probability of quality contingent payment is large enough to incentivize provision, but not so large as to induce overly aggressive bidding. This implementation only relies upon preferences for maximizing one’s own profit and the rationality of backward induction. An experimental finding not predicted in our setting is that suppliers earn positive economic profits inside the Goldilocks region, which can be explained by suppliers’ risk aversion. The results have implications for the effective design of contingent payments in contracts.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142573196","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2024-11-01DOI: 10.1016/j.euroecorev.2024.104880
Mikkel Aagaard Houmark , Cecilie Marie Løchte Jørgensen , Ida Lykke Kristiansen , Miriam Gensowski
We study how children’s socio-emotional skills and well-being in adolescence are affected by longer parental care during infancy. Exploiting a Danish reform that extended paid parental leave in 2002 and effectively delayed children’s entry into formal out-of-home care, we show that longer leave increases adolescent conscientiousness, emotional stability, and well-being, and reduces school absenteeism. The effects are strongest for children of mothers who would have taken short leave in the absence of the reform. For this group, longer leave also increases school grades and reduces the risk of getting a psychiatric diagnosis. This highlights how time spent with a parent is particularly productive during very early childhood.
{"title":"Effects of extending paid parental leave on children’s socio-emotional skills and well-being in adolescence","authors":"Mikkel Aagaard Houmark , Cecilie Marie Løchte Jørgensen , Ida Lykke Kristiansen , Miriam Gensowski","doi":"10.1016/j.euroecorev.2024.104880","DOIUrl":"10.1016/j.euroecorev.2024.104880","url":null,"abstract":"<div><div>We study how children’s socio-emotional skills and well-being in adolescence are affected by longer parental care during infancy. Exploiting a Danish reform that extended paid parental leave in 2002 and effectively delayed children’s entry into formal out-of-home care, we show that longer leave increases adolescent conscientiousness, emotional stability, and well-being, and reduces school absenteeism. The effects are strongest for children of mothers who would have taken short leave in the absence of the reform. For this group, longer leave also increases school grades and reduces the risk of getting a psychiatric diagnosis. This highlights how time spent with a parent is particularly productive during very early childhood.</div></div>","PeriodicalId":48389,"journal":{"name":"European Economic Review","volume":null,"pages":null},"PeriodicalIF":2.8,"publicationDate":"2024-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142554644","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
扫码关注我们
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号