Average Effective Tax Rates in Mexico

The paper estimates average effective tax rates on consumption, labor and capital income for Mexico, using the method of Mendoza et al. (1994) and related extensions, including two novel refinements. On average, it is found that consumption taxes are roughly between 7 and 14%, whereas labor and capital income taxes are between 8 and 12.5%, and 8.5 and 15%, respectively. Tax estimates are found to be consistent with predictions from theory in general, both for Mexico as well as for a sample of OECD countries.effective tax rates, consumption tax, factor income taxes, international tax policy

Determinants of the Venezuelan Banking Crisis of the Mid-1990s: An Event History Analysis

This paper uses event history analysis to test the significance of several macro-economic and bank-specific variables in explaining bank failures during the Venezuelan banking crisis of the mid-1990s. Poor bank profitability, proxied by a low net interest margin, and low GDP growth are found significant in increasing the probability of bank failure. Other useful indicators, for some model specifications, are the share of nonperforming loans and that of non productive assets to banks’ own funds, which raise the likelihood of crisis. A large amount of bank liquid assets, in turn, reduces the likelihood of failure for some model specifications. The opposite is true for high real deposit rates. Although it could be interpreted, at first sight, as a too restrictive monetary policy, this is not supported by the lack of significance of the real lending rate and, even more so, real money growth, a more direct indicator of the monetary policy stance.Venezuela, banking crisis, early indicators

Alternative Effects of Antidumping Policy: Should Mexican Authorities be Worried?

Administered protection is not the only outcome of antidumping measures. This paper suggests a basic model of repeated interaction between a domestic and a foreign firm. Competing in prices in the importing market, antidumping action serves as the means to enforce and sustain tacit collusion between the firms. The main result is that price distortions by antidumping policy are a departure point for the achievement of the collusive outcome. Discount factors of future profits are altered relative to those observed under free trade, delaying domestic firm’s propensity to collude and prompting foreign firm’s.price competition, repeated interaction, tacit collusion, antidumping

The 1987 Mexican Disinflation Program: An Exchange-rate-based Stabilization?

We examine whether Mexico’s disinflation experience during 1987-94 fits the widely accepted set of stylized facts of exchange-ratebased stabilization (ERBS) on inflation, the boom-recession business cycle, and the external sector. A cursory look at Mexican data shows that the experience fits quite closely the stylized facts of ERBS. However, the paper shows that there were some important differences and peculiarities of the Mexican case that deserve further study, especially regarding the role of the nominal anchor and the nature of the business cycle.stabilization, disinflation, business cycle, nominal anchor

The Variation of Solar Fe 14 and Fe 10 Flux over 1.5 Solar Activity Cycles

A new source of data on the solar output, namely limb flux from the one- and two-million degree corona is presented. This parameter is derived from data obtained at the National Solar Observatory at Sacramento Peak with the 40 cm coronagraph of the John W. Evans Solar Facility and the Emission Line Coronal Photometer. The limb flux is defined to be the latitude-averaged intensity in millionths of the brightness of disk center from an annulus of width 1.1 minutes centered at a height of 0.15 solar constant above the limb of emission from lines at 6374A (Fe X) or 5303A (Fe XIV). Fe XIV data have been obtained since 1973 and Fe X since 1984. Examination of the Fe XIV data shows that there is ambiguity in the definition of the last two solar activity minima, which can affect the determination of cycle rise times and lengths. There is an indication that a constant minimum or basal corona may exist at solar minimum. Cycle 22 has had a much faster onset than Cycle 21 and has now overtaken Cycle 21. The rise characteristics of the two cycles were very similar up until Jul. to Aug. 1989, at which time a long-term maximum occurred in Fe X and Fe XIV, which could possibly be the solar maximum. Another maximum is developing at the current time. Cycle 21 was characterized in Fe XIV by at least 4 major thrusts or bursts of activity, each lasting on the order of a year and all having similar maximum limb fluxes which indicates that coronal energy output is sustained over periods in which the sunspot number declines significantly. Dramatic increases in the limb fluxes occur from minimum to maximum, ranging from factors of 14 to 21 in the two lines. Two different techniques to predict the epoch of solar maximum have been applied to the Fe XIV data, resulting in estimates of April 1989 (plus or minus 1 mo) and May 1990 (plus or minus 2 mos)

Libertarianism With a Twist

Review of SIMPLE RULES FOR A COMPLEX WORLD. By Richard A. Epstein. Cambridge: Harvard University Press. 1995. Pp. xiv, 361