Monetary and fiscal policy aspects of indirect tax changes in a monetary union

In recent years a number of European countries have shifted their tax structure more strongly towards indirect taxes, motivated, inter alia, by the intention to foster competitiveness. Against this background, this paper develops a tractable two-country model of a monetary union, characterised by national fiscal and supranational monetary policy, with price-setting firms and endogenously determined terms of trade. The paper discusses a number of monetary and fiscal policy questions which emerge if one of the countries shifts its tax structure more strongly towards indirect taxes. Qualitatively, it is shown that the long-run effects of such a unilateral policy shift on output and consumption within and between the two countries depend sensitively on whether indirect tax revenues are used to lower direct taxes or to finance additional government expenditures. Moreover, short-run dynamics are shown to depend significantly on the speed at which fiscal adjustments take place, on the choice of the inflation index stabilised by the central bank, and on whether the tax shift is anticipated or not. Quantitatively, the calibrated model version indicates that only if the additional indirect tax revenues are used to finance a cut in direct taxes there is some, though limited scope for non-negligible spillovers between countries. JEL Classification: E61, E63, F42Currency union, fiscal regimes, monetary policy

State-dependence of climate sensitivity: attractor constraints and palaeoclimate regimes

Equilibrium climate sensitivity (ECS) is a key predictor of climate change. However, it is not very well constrained, either by climate models or by observational data. The reasons for this include strong internal variability and forcing on many time scales. In practise this means that the 'equilibrium' will only be relative to fixing the slow feedback processes before comparing palaeoclimate sensitivity estimates with estimates from model simulations. In addition, information from the late Pleistocene ice age cycles indicates that the climate cycles between cold and warm regimes, and the climate sensitivity varies considerably between regime because of fast feedback processes changing relative strength and time scales over one cycle. In this paper we consider climate sensitivity for quite general climate dynamics. Using a conceptual Earth system model of Gildor and Tziperman (2001) (with Milankovich forcing and dynamical ocean biogeochemistry) we explore various ways of quantifying the state-dependence of climate sensitivity from unperturbed and perturbed model time series. Even without considering any perturbations, we suggest that climate sensitivity can be usefully thought of as a distribution that quantifies variability within the 'climate attractor' and where there is a strong dependence on climate state and more specificially on the 'climate regime' where fast processes are approximately in equilibrium. We also consider perturbations by instantaneous doubling of CO$_2$ and similarly find a strong dependence on the climate state using our approach.Comment: 32 pages, 10 figure

Extreme sensitivity and climate tipping points

A climate state close to a tipping point will have a degenerate linear response to perturbations, which can be associated with extreme values of the equilibrium climate sensitivity (ECS). In this paper we contrast linearized (`instantaneous') with fully nonlinear geometric (`two-point') notions of ECS, in both presence and absence of tipping points. For a stochastic energy balance model of the global mean surface temperature with two stable regimes, we confirm that tipping events cause the appearance of extremes in both notions of ECS. Moreover, multiple regimes with different mean sensitivities are visible in the two-point ECS. We confirm some of our findings in a physics-based multi-box model of the climate system.Comment: 11 figure

Regularized inner products of meromorphic modular forms and higher Green's functions

In this paper we study generalizations of quadratic form Poincar\'e series, which naturally occur as outputs of theta lifts. Integrating against them yields evaluations of higher Green's functions. For this we require a new regularized inner product, which is of independent interest

Outrunning the Gender Gap – Boys and Girls Compete Equally

Recent studies find that women are less competitive than men. This gender difference in competitiveness has been suggested as one possible explanation for why men occupy the majority of top positions in many sectors. In this study we explore competitiveness in children, with the premise that both culture and gendered stereotypes regarding the task at hand may influence competitive behavior. A related field experiment on Israeli children shows that only boys react to competition by running faster when competing in a race. We here test if there is a gender gap in running among 7-10 year old Swedish children. We also introduce two female sports, skipping rope and dancing, to see if competitiveness is task dependent. We find no gender difference in reaction to competition in any task; boys and girls compete equally. If gender equality matters for competitiveness, this result may be explained by cultural factors, since Sweden scores higher on gender equality indices than Israel.competitiveness; gender differences; field experiment