Download or read book Estimating the Elasticity of Intertemporal Substitution Using Mortgage Notches written by Michael Best and published by . This book was released on 2018 with total page 77 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a novel source of quasi-experimental variation in interest rates, we develop a new approach to estimating the Elasticity of Intertemporal Substitution (EIS). In the UK, the mortgage interest rate features discrete jumps -- notches -- at thresholds for the loan-to-value (LTV) ratio. These notches generate large bunching below the critical LTV thresholds and missing mass above them. We develop a dynamic model that links these empirical moments to the underlying structural EIS. The average EIS is small, around 0.1, and quite homogeneous in the population. This finding is robust to structural assumptions and can allow for uncertainty, a wide range of risk preferences, portfolio reallocation, liquidity constraints, present bias, and optimization frictions. Our findings have implications for the numerous calibration studies that rely on larger values of the EIS.

Download or read book Estimating the Elasticity of Intertemporal Substitution when Instruments are Weak written by Motohiro Yogo and published by . This book was released on 2004 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book A Tax based Estimate of the Elasticity of Intertemporal Substitution written by Jonathan Gruber and published by . This book was released on 2006 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: One of the most important behavioral parameters in macroeconomics is the elasticity of intertemporal substitution (EIS). Starting with the seminal work of Hall (1978), researchers have used an Euler equation framework to estimate the EIS, relating the growth rate of consumption to the after-tax interest rate facing consumers . This large literature has, however, produced very mixed results, perhaps due to an important limitation: the impact of the interest rate on consumption or savings is identified by time series movements in interest rates. Yet the factors that cause time series movements in interest rates may themselves be correlated with consumption or savings decisions. I address this problem by using variation across individuals in the capital income tax rate. Condidtional on observable characteristics of individuals, tax rate movements cause exogenous shifts in the after-tax interest rate. Using data on total non-durable consumption from the Consumer Expenditure Survey over two decades, I estimate a surprisingly high EIS of 2. This finding is robust to a variety of specification checks.

Download or read book On the Use of Elasticity of Intertemporal Substitution written by Aleksandar Georgiev and published by . This book was released on 2004 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: Our main message is that it is Elasticity of Intertemporal Substitution (EIS), which is at the heart of asset pricing puzzles, rather than Risk Aversion. An approximation of the main asset pricing equation demonstrates that central role and allows us to show that the Campbell-Cochrane model produces wide range of mean equity premia, because it uses time-varying EIS. The paper introduces a complete-markets consistency check, which applied to the Epstein-Zin model allows us to estimate the parameter EIS over different horizons. We conclude that EIS should be used (modelled and thought of) as a variable, rather than as a parameter.

Download or read book Essays on the Elasticity of Intertemporal Substitution written by Lance Deloyce Cundy and published by . This book was released on 2018 with total page 71 pages. Available in PDF, EPUB and Kindle. Book excerpt: Estimates give evidence of heterogeneity of the EIS in the periods of expansion and quantitative easing. These quantile results can be used to inform the theory behind the EIS and quantile models of rational behavior.

Download or read book Dollar Invoicing Global Value Chains and the Business Cycle Dynamics of International Trade written by Mr. David Cook and published by International Monetary Fund. This book was released on 2022-02-11 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent literature has highlighted that international trade is mostly priced in a few key vehicle currencies and is increasingly dominated by intermediate goods and global value chains (GVCs). Taking these features into account, this paper reexamines the relationship between monetary policy, exchange rates and international trade flows. Using a dynamic stochastic general equilibrium (DSGE) framework, it finds key differences between the response of final goods and GVC trade to both domestic and foreign shocks depending on the origin and ultimate destination of value added and the intermediate shipments involved. For example, the model shows that in response to a dollar appreciation triggered by a US interest rate increase, direct bilateral trade between non-US countries contracts more than global value chain oriented trade which feeds US final demand, and exports to the US decline much more when measured in gross as opposed to value added terms. We use granular data on GVCs at the sector level to document empirical evidence in favor of these key predictions of the model.

Download or read book Taxation and Migration written by Reuven S. Avi-Yonah and published by Kluwer Law International B.V.. This book was released on 2015-08-21 with total page 242 pages. Available in PDF, EPUB and Kindle. Book excerpt: Migration has become an increasingly important phenomenon for societies, especially given its highly controversial political dimension. The complexity of the migrant integration process and its many varieties present challenges to policymakers who need high-quality information on which to base decisions. Nowhere is this necessity more pressing than in the development of relevant tax rules that meet the basic requirements of efficiency and equity. Moreover, the ascent of the so-called emerging economies coupled with the stagnation of the richest economies of the world implies reform of the current competition-based international tax regime and the adoption of a more cooperative paradigm. This important and timely book, for the first time in such depth, explores such aspects of the problem as the following: - migration for tax reasons, especially corporate "inversions" (change in corporate residence for tax purposes); - tax consequences related to individuals who receive free or subsidized education in one country and profit from it in another; - taxing cross-border retirement income; and - migration-related aspects of tax preferential treatment of the elderly. With particular emphasis on the effects and opportunities created by the changing international tax regime - and with attention to the role of tax treaties and recent court cases - chapters by well known tax experts present evidence on the consequences of migration in all its facets and simulate the effects of several recently enacted and proposed changes in tax law in European countries, the United States, and other jurisdictions. The grounded propositions and recommendations offered in this deeply informed book will allow policymakers to draft tax-residence rules that minimize distortion and promote fairness. The book will also be of interest to tax law practitioners and other tax specialists, migration experts, and academics investigating one of the crucial political issues of our time.

Download or read book Global Economic Prospects 2006 written by and published by World Bank Publications. This book was released on with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt: International migration, the movement of people across international boundaries to improve economic opportunity, has enormous implications for growth and welfare in both origin and destination countries. An important benefit to developing countries is the receipt of remittances or transfers from income earned by overseas emigrants. Official data show that development countries' remittance receipts totaled 160 billion in 2004, more than twice the size of official aid. This year's edition of Global Economic Prospects focuses on remittances and migration. The bulk of the book covers remittances.

Download or read book How Big Small are Fiscal Multipliers written by Ethan Ilzetzki and published by International Monetary Fund. This book was released on 2011-03-01 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: We contribute to the intense debate on the real effects of fiscal stimuli by showing that the impact of government expenditure shocks depends crucially on key country characteristics, such as the level of development, exchange rate regime, openness to trade, and public indebtedness. Based on a novel quarterly dataset of government expenditure in 44 countries, we find that (i) the output effect of an increase in government consumption is larger in industrial than in developing countries, (ii) the fisscal multiplier is relatively large in economies operating under predetermined exchange rate but zero in economies operating under flexible exchange rates; (iii) fiscal multipliers in open economies are lower than in closed economies and (iv) fiscal multipliers in high-debt countries are also zero.

Download or read book Tax Systems written by Joel Slemrod and published by MIT Press. This book was released on 2013-12-13 with total page 235 pages. Available in PDF, EPUB and Kindle. Book excerpt: An approach to taxation that goes beyond an emphasis on tax rates to consider such aspects as administration, compliance, and remittance. Despite its theoretical elegance, the standard optimal tax model has significant limitations. In this book, Joel Slemrod and Christian Gillitzer argue that tax analysis must move beyond the emphasis on optimal tax rates and bases to consider such aspects of taxation as administration, compliance, and remittance. Slemrod and Gillitzer explore what they term a tax-systems approach, which takes tax evasion seriously; revisits the issue of remittance, or who writes the check to cover tax liability (employer or employee, retailer or consumer); incorporates administrative and compliance costs; recognizes a range of behavioral responses to tax rates; considers nonstandard instruments, including tax base breadth and enforcement effort; and acknowledges that tighter enforcement is sometimes a more socially desirable way to raise revenue than an increase in statutory tax rates. Policy makers, Slemrod and Gillitzer argue, would be well advised to recognize the interrelationship of tax rates, bases, enforcement, and administration, and acknowledge that tax policy is really tax-systems policy.

Download or read book Teacher Pay and Teacher Quality written by Dale Ballou and published by W. E. Upjohn Institute. This book was released on 1997 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book asks whether higher salaries have improved the quality of newly recruited teachers. It reviews data on the characteristics of beginning teachers and shows how important features of the labor market for teachers systematically undermine efforts to improve teacher quality. The text also offers a comparison of personnel policies and staffing patterns in public and private schools, focusing on national trends in teacher recruitment. It discusses ways to measure teacher quality, examines several indicators of quality, such as student achievement and principals' ratings of their staffs, and then uses these findings to assess the evidence on salary growth and teacher recruitment. It looks at what has gone wrong with teacher recruitment and offers an analysis of the operation of the teacher labor market so as to interpret findings. These results are used to review the implications for teacher recruitment of various other reforms of current interest. The text also describes the prospects for reform by examining salary differentiation and rising standards and assesses personnel policies in the private sector to see whether private schools offer a model for reforming public education. This section details teacher quality, working conditions, and compensation policies. The book concludes with a summation of its major points. (Contains an index, approximately 315 references, 12 data tables and 17 figures.) (RJM)

Download or read book Managing Openness written by Mona Haddad and published by World Bank Publications. This book was released on 2011 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global financial crisis triggered a broad reassessment of economic integration policies in developed and developing countries worldwide. The crisis-induced collapse in trade was the sharpest ever since World War II, affecting all countries and all product categories. A huge shock to the trading system, combined with severe macroeconomic instability, makes it natural for policymakers to call into question the basic underlying assumptions of trade liberalization and openness. In particular, outward-oriented or export-led growth strategies are being reassessed as openness is increasingly associated with greater volatility. However, it is crucial not to lose sight of the dynamic benefits that openness can offer. Examples include technology transfer, increased competitive pressure that reduces markups and improves efficiency, and economies of scale. The real question is how to manage outward-oriented strategies so as to maximize the benefits of openness while minimizing risks. This book aims to contribute to this important and ongoing policy debate, bringing together recent empirical work on the trade collapse, its causes and consequences, and the broader trade policy agenda in the post-crisis environment. It addresses critical policy issues revolving around the topic of outward-oriented growth strategy, including policy instruments that help manage risks associated with outward-orientation, lessons learned from the crisis for particular countries and regions, and how emerging trade policy issues such as climate change, commodities, global production networking, and migration affect the prospects for recovery and outward-oriented growth.

Download or read book Moral Hazard in Health Insurance written by Amy Finkelstein and published by Columbia University Press. This book was released on 2014-12-02 with total page 161 pages. Available in PDF, EPUB and Kindle. Book excerpt: Addressing the challenge of covering heath care expenses—while minimizing economic risks. Moral hazard—the tendency to change behavior when the cost of that behavior will be borne by others—is a particularly tricky question when considering health care. Kenneth J. Arrow’s seminal 1963 paper on this topic (included in this volume) was one of the first to explore the implication of moral hazard for health care, and Amy Finkelstein—recognized as one of the world’s foremost experts on the topic—here examines this issue in the context of contemporary American health care policy. Drawing on research from both the original RAND Health Insurance Experiment and her own research, including a 2008 Health Insurance Experiment in Oregon, Finkelstein presents compelling evidence that health insurance does indeed affect medical spending and encourages policy solutions that acknowledge and account for this. The volume also features commentaries and insights from other renowned economists, including an introduction by Joseph P. Newhouse that provides context for the discussion, a commentary from Jonathan Gruber that considers provider-side moral hazard, and reflections from Joseph E. Stiglitz and Kenneth J. Arrow. “Reads like a fireside chat among a group of distinguished, articulate health economists.” —Choice

Download or read book Household Portfolios written by Luigi Guiso and published by MIT Press. This book was released on 2002 with total page 552 pages. Available in PDF, EPUB and Kindle. Book excerpt: Theoretical and empirical analysis of the structure of household portfolios.

Download or read book The Housing Challenge in Emerging Asia written by Matthias Helbe and published by . This book was released on 2016 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Housing Challenge in Emerging Asia: Options and Solutions provides new insights and ideas to best design and implement housing policies aimed at improving access to affordable and adequate housing. The book offers an innovative theoretical framework to conceptualize and analyze various housing policies. It also critically reviews housing policies of various countries and draws lessons for others. The countries studied include advanced economies within and outside Asia, such as Japan, the Republic of Korea, Singapore, Switzerland, the United Kingdom, and the United States, as well as emerging countries within Asia, such as the People's Republic of China and India.

Download or read book The Role and Design of Net Wealth Taxes in the OECD written by Collectif and published by OECD. This book was released on 2018-04-16 with total page 112 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report examines and assesses the current and historical use of net wealth taxes, defined as recurrent taxes on individual net assets, in OECD countries. It provides background on the use of wealth taxes over time in OECD countries as well as on trends in income and wealth inequality. It then assesses the case for and against the use of a net wealth tax to raise revenues and reduce inequality, based on efficiency, equity and tax administration considerations. The effects of personal capital income taxes and taxes on wealth transfers are also discussed to understand how these taxes interact with net wealth taxes. Finally, the report looks at practical tax design issues and shows that the way a net wealth tax is designed can have a significant impact on the effectiveness and fairness of the tax. The report concludes with a number of practical tax policy recommendations regarding net wealth taxes.

Download or read book Women Working Longer written by Claudia Goldin and published by University of Chicago Press. This book was released on 2018-04-19 with total page 326 pages. Available in PDF, EPUB and Kindle. Book excerpt: Today, more American women than ever before stay in the workforce into their sixties and seventies. This trend emerged in the 1980s, and has persisted during the past three decades, despite substantial changes in macroeconomic conditions. Why is this so? Today’s older American women work full-time jobs at greater rates than women in other developed countries. In Women Working Longer, editors Claudia Goldin and Lawrence F. Katz assemble new research that presents fresh insights on the phenomenon of working longer. Their findings suggest that education and work experience earlier in life are connected to women’s later-in-life work. Other contributors to the volume investigate additional factors that may play a role in late-life labor supply, such as marital disruption, household finances, and access to retirement benefits. A pioneering study of recent trends in older women’s labor force participation, this collection offers insights valuable to a wide array of social scientists, employers, and policy makers.