Pub Date : 2021-09-11eCollection Date: 2021-09-01DOI: 10.1093/cesifo/ifab010
Asli Demirgüç-Kunt, Michael Lokshin, Iván Torre
This article analyses the reopening process of countries in Europe and Central Asia after the first wave of the COVID-19 pandemic and provides evidence on the effects of different reopening trajectories and their timing and speed on economic recovery. The analysis indicates that countries that adopted a gradual, staged reopening experienced stronger economic recovery compared with the countries that rushed into lifting the restrictive measures before the pandemic was under control. Postponing lifting the restrictions until after the pandemic's peak was reached has a positive impact on economic activity. Governance also matters: a higher level of trust in government is associated with increased economic activity among countries that carried out a gradual reopening process. There is also suggestive evidence that providing people objective data on the progress of the pandemic may speed up the recovery process. (JEL codes: D14, E21, and G51).
{"title":"Opening-Up Trajectories and Economic Recovery: Lessons after the First Wave of the COVID-19 Pandemic.","authors":"Asli Demirgüç-Kunt, Michael Lokshin, Iván Torre","doi":"10.1093/cesifo/ifab010","DOIUrl":"10.1093/cesifo/ifab010","url":null,"abstract":"<p><p>This article analyses the reopening process of countries in Europe and Central Asia after the first wave of the COVID-19 pandemic and provides evidence on the effects of different reopening trajectories and their timing and speed on economic recovery. The analysis indicates that countries that adopted a gradual, staged reopening experienced stronger economic recovery compared with the countries that rushed into lifting the restrictive measures before the pandemic was under control. Postponing lifting the restrictions until after the pandemic's peak was reached has a positive impact on economic activity. Governance also matters: a higher level of trust in government is associated with increased economic activity among countries that carried out a gradual reopening process. There is also suggestive evidence that providing people objective data on the progress of the pandemic may speed up the recovery process. (JEL codes: D14, E21, and G51).</p>","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2021-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8499909/pdf/ifab010.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"39537833","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using confidential tax return data, we provide a unique research setting in which the Belgian notional interest deduction (NID) is replaced by the Allowance for Growth and Investment (AGI) as it is proposed by the European Commission. Our results show that the AGI would be a more viable option from a budgetary view. From a company view, however, introducing an AGI system would increase the probability of a higher effective tax rate (ETR). Especially large companies would be harmed as they would face a 7.6 percentage point higher probability of an ETR increase compared with SMEs. Furthermore, we find that there is a positive relationship between the equity ratio and the increased ETR, which is stronger for large firms compared to SMEs. This is in line with previous studies stating that large firms adjusted more aggressively to the NID by increasing their equity ratio more heavily than SMEs. However, large firms still face an ETR that is on average 10.4 percentage points lower compared with SMEs, indicating that the AGI is insufficient to undo the unequal level playing field between large and small companies. (JEL codes: H21, G32, H25, K34).
{"title":"An Ex-Ante Assessment of the AGI: Firm-Level Evidence from Belgian Tax Return Data","authors":"Buyl P, Roggeman A, Verleyen I.","doi":"10.1093/cesifo/ifab007","DOIUrl":"https://doi.org/10.1093/cesifo/ifab007","url":null,"abstract":"<span><div>Abstract</div>Using confidential tax return data, we provide a unique research setting in which the Belgian notional interest deduction (NID) is replaced by the Allowance for Growth and Investment (AGI) as it is proposed by the European Commission. Our results show that the AGI would be a more viable option from a budgetary view. From a company view, however, introducing an AGI system would increase the probability of a higher effective tax rate (ETR). Especially large companies would be harmed as they would face a 7.6 percentage point higher probability of an ETR increase compared with SMEs. Furthermore, we find that there is a positive relationship between the equity ratio and the increased ETR, which is stronger for large firms compared to SMEs. This is in line with previous studies stating that large firms adjusted more aggressively to the NID by increasing their equity ratio more heavily than SMEs. However, large firms still face an ETR that is on average 10.4 percentage points lower compared with SMEs, indicating that the AGI is insufficient to undo the unequal level playing field between large and small companies. (JEL codes: H21, G32, H25, K34).</span>","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2021-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138504594","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The relationship between trade and inequality is complex, and the existing literature concludes that the impacts of trade on inequality are ambiguous. This article addresses this ambiguity and presents robust evidence that the effects of trade on inequality depend on economic development, when it occurred in recent decades, and their various measures. It proposes a novel identification strategy to solve for endogeneity problem in the literature by using trade as predicted by a gravity equation as an instrument for actual trade. It estimates the effect of both trade policies and trade volumes on inequality measured both before and after taxes and transfers. This article takes advantage of large and long panel data by conducting cross-examinations by economic development and economic history. The results show that international trade exacerbates inequality in the pre-taxes, but the effects disappear after taxes and transfers are adjusted; thus, it supports the compensation hypothesis. It increases inequality in rich economies while reducing it in poor economies, which confirms the standard Stolper and Samuelson theorem. Post-1991 trade experience was inequality increasing but pre-1991 trade was inequality decreasing; however, trade opening by reducing regulations, taxes, and tariffs was always inequality increasing. (JEL codes: D63, P33, and F63)
{"title":"Impact of Trade on Inequality: New Evidence of What, When, and Where","authors":"A. Siddique","doi":"10.1093/CESIFO/IFAB005","DOIUrl":"https://doi.org/10.1093/CESIFO/IFAB005","url":null,"abstract":"\u0000 The relationship between trade and inequality is complex, and the existing literature concludes that the impacts of trade on inequality are ambiguous. This article addresses this ambiguity and presents robust evidence that the effects of trade on inequality depend on economic development, when it occurred in recent decades, and their various measures. It proposes a novel identification strategy to solve for endogeneity problem in the literature by using trade as predicted by a gravity equation as an instrument for actual trade. It estimates the effect of both trade policies and trade volumes on inequality measured both before and after taxes and transfers. This article takes advantage of large and long panel data by conducting cross-examinations by economic development and economic history. The results show that international trade exacerbates inequality in the pre-taxes, but the effects disappear after taxes and transfers are adjusted; thus, it supports the compensation hypothesis. It increases inequality in rich economies while reducing it in poor economies, which confirms the standard Stolper and Samuelson theorem. Post-1991 trade experience was inequality increasing but pre-1991 trade was inequality decreasing; however, trade opening by reducing regulations, taxes, and tariffs was always inequality increasing. (JEL codes: D63, P33, and F63)","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2021-05-13","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/CESIFO/IFAB005","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44628811","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
There is growing debate, both social and academic, about the possibility of levying an annual net wealth tax. Until a few years ago, such a proposal appeared difficult to both implement and control, but recent technological innovations, which could greatly facilitate the periodic valuation of wealth, combined with improvements in international tax information sharing could make a “modern wealth tax” possible. Nonetheless, a number of challenges regarding its design still need to be addressed. Taking advantage of the Spanish experience—the only EU country to levy a wealth tax—we undertake a quantitative analysis of various key legal elements of the current tax (exemptions and the common income and wealth tax ceiling) by means of a tax simulator we have developed; we also analyze its redistributive power. Our results show that the family business exemption and the common ceilings are highly regressive. We also assess the effectiveness of alternative reforms with more comprehensive tax bases (JEL codes: H24, H23, and D31).
{"title":"A Quantitative Assessment of the Net Wealth Tax: The Spanish Experience","authors":"J. Duran-Cabré, Alejandro Esteller Moré","doi":"10.1093/CESIFO/IFAB004","DOIUrl":"https://doi.org/10.1093/CESIFO/IFAB004","url":null,"abstract":"\u0000 There is growing debate, both social and academic, about the possibility of levying an annual net wealth tax. Until a few years ago, such a proposal appeared difficult to both implement and control, but recent technological innovations, which could greatly facilitate the periodic valuation of wealth, combined with improvements in international tax information sharing could make a “modern wealth tax” possible. Nonetheless, a number of challenges regarding its design still need to be addressed. Taking advantage of the Spanish experience—the only EU country to levy a wealth tax—we undertake a quantitative analysis of various key legal elements of the current tax (exemptions and the common income and wealth tax ceiling) by means of a tax simulator we have developed; we also analyze its redistributive power. Our results show that the family business exemption and the common ceilings are highly regressive. We also assess the effectiveness of alternative reforms with more comprehensive tax bases (JEL codes: H24, H23, and D31).","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2021-04-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/CESIFO/IFAB004","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41746140","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
When sovereign spreads increase, debt managers in the euro area face a funding dilemma. They can either issue more short-term debt, thereby increasing roll-over risk, or issue long-term debt at higher borrowing costs. The latter choice may threaten debt sustainability. Using a sample of monthly data for 10 countries in the euro area, we measure how the share of short-term debt issuance reacts to bond yields, term spreads, default spreads, and money market spreads. We find that sovereign risk is a significant variable in debt reaction functions: higher default spreads increase the reliance on short-term funding, making the euro area more prone to funding crises in individual member states. As a solution to this problem, we discuss a proposal for an interest stabilization mechanism. By providing conditional interest subsidies to distressed countries, such a mechanism can maintain market access and avoid bad bond market equilibria. It will reduce the incentive of debt managers to shorten the maturity structure of public debt and thereby make the euro area less fragile (JEL codes: E43, F45, and H63).
{"title":"Debt Managers’ Reaction to Sovereign Risk in the Euro Area: Evidence and Policy Implications","authors":"I. Arnold","doi":"10.1093/CESIFO/IFAB001","DOIUrl":"https://doi.org/10.1093/CESIFO/IFAB001","url":null,"abstract":"\u0000 When sovereign spreads increase, debt managers in the euro area face a funding dilemma. They can either issue more short-term debt, thereby increasing roll-over risk, or issue long-term debt at higher borrowing costs. The latter choice may threaten debt sustainability. Using a sample of monthly data for 10 countries in the euro area, we measure how the share of short-term debt issuance reacts to bond yields, term spreads, default spreads, and money market spreads. We find that sovereign risk is a significant variable in debt reaction functions: higher default spreads increase the reliance on short-term funding, making the euro area more prone to funding crises in individual member states. As a solution to this problem, we discuss a proposal for an interest stabilization mechanism. By providing conditional interest subsidies to distressed countries, such a mechanism can maintain market access and avoid bad bond market equilibria. It will reduce the incentive of debt managers to shorten the maturity structure of public debt and thereby make the euro area less fragile (JEL codes: E43, F45, and H63).","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2021-03-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/CESIFO/IFAB001","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41856770","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Garín et al.’s (2019) empirical study shows that a positive technology shock is more expansionary when the ZLB binds than when it does not. This cannot be explained by a basic new-Keynesian model with sticky prices. In this paper, I resolve this puzzle by extending the model to include wage stickiness. (JEL codes: E32, E52, E62, N12)
{"title":"Are Technology Shocks More Expansionary at the ZLB?","authors":"Yangyang Ji","doi":"10.1093/CESIFO/IFAB002","DOIUrl":"https://doi.org/10.1093/CESIFO/IFAB002","url":null,"abstract":"\u0000 Garín et al.’s (2019) empirical study shows that a positive technology shock is more expansionary when the ZLB binds than when it does not. This cannot be explained by a basic new-Keynesian model with sticky prices. In this paper, I resolve this puzzle by extending the model to include wage stickiness. (JEL codes: E32, E52, E62, N12)","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2021-03-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/CESIFO/IFAB002","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44505116","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We illustrate how financial market data are informative about the interactions between monetary and fiscal policy. Federal funds futures are private contracts that reflect investor’s expectations about future monetary policy decisions. By relating price movements of these contracts with President Trump’s tweets on monetary policy, we explore how financial market participants have perceived attempts by the President to influence monetary policy decisions. Our results indicate that market participants expected the Federal Reserve Bank to adjust monetary policy in the direction suggested by President Trump. (JEL codes: E44, E52, and E58)
{"title":"Furor over the Fed: A President’s Tweets and Central Bank Independence","authors":"Antoine Camous, D. Matveev","doi":"10.1093/CESIFO/IFAA020","DOIUrl":"https://doi.org/10.1093/CESIFO/IFAA020","url":null,"abstract":"\u0000 We illustrate how financial market data are informative about the interactions between monetary and fiscal policy. Federal funds futures are private contracts that reflect investor’s expectations about future monetary policy decisions. By relating price movements of these contracts with President Trump’s tweets on monetary policy, we explore how financial market participants have perceived attempts by the President to influence monetary policy decisions. Our results indicate that market participants expected the Federal Reserve Bank to adjust monetary policy in the direction suggested by President Trump. (JEL codes: E44, E52, and E58)","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2021-03-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"46683454","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We use the Flexible Professional in the Knowledge Society data set to learn about gender gaps during the early career of college graduates in Europe. We document substantial heterogeneity across fields of education in the gender wage gap at the entrance to the labour market. We find that the gap evolves against women over the five years after graduation in Social Science and in Economics, Business, and Law. Finally, we estimate a significant female wage growth penalty after we control for observable characteristics only within the Economics, Business, and Law category. Within this field, we estimate a female annual wage growth penalty of 1.1 percentage points among individuals who remained childless and 2.5 percentage points among individuals who became parents. A small fraction of the wage growth gap disappears after we control for variables capturing individual differences in job mobility or in labour market attachment during the early career. (JEL codes: J16, J24, J31)
{"title":"Wage Growth across Fields of Study among Young College Graduates: Is There a Gender Gap?","authors":"Rocío Sánchez-Mangas, Virginia Sánchez-Marcos","doi":"10.1093/CESIFO/IFAA021","DOIUrl":"https://doi.org/10.1093/CESIFO/IFAA021","url":null,"abstract":"\u0000 We use the Flexible Professional in the Knowledge Society data set to learn about gender gaps during the early career of college graduates in Europe. We document substantial heterogeneity across fields of education in the gender wage gap at the entrance to the labour market. We find that the gap evolves against women over the five years after graduation in Social Science and in Economics, Business, and Law. Finally, we estimate a significant female wage growth penalty after we control for observable characteristics only within the Economics, Business, and Law category. Within this field, we estimate a female annual wage growth penalty of 1.1 percentage points among individuals who remained childless and 2.5 percentage points among individuals who became parents. A small fraction of the wage growth gap disappears after we control for variables capturing individual differences in job mobility or in labour market attachment during the early career. (JEL codes: J16, J24, J31)","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2021-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/CESIFO/IFAA021","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43601101","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","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