A note on Fontaine theory using different Lubin-Tate groups

Using different Lubin-Tate groups, we compare $(\phi, \Gamma)$ modules associated to a Galois representation via Fontaine's theory

Steady state Laffer curve with the underground economy

This paper studies equilibrium effects of fiscal policy within a dynamic general equilibrium model where tax evasion and underground activities are explicitly incorporated. In particular, we show that a dynamic general equilibrium with tax evasion may give a rational justification for a variant of the Laffer curve for a plausible parameterization. In this respect, the paper also identifies the different parameterization of the model formulation with tax evasion under which a Laffer curve exist. From a revenue maximizing perspective, the key policy messages are that bringing tax payers to compliance would be better than announcing to punish them if convicted, and that an economy without problems of compliance is much more sensitive to myopic behavior.Two-sector Dynamic General Equilibrium Models, Fiscal Policy, Tax Evasion and Underground Activities.

CONSUMPTION AND INCOME SMOOTHING

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Consumption and Income Smoothing

This paper presents a two sector dynamic general equilibrium model in which income smoothing takes place within the households (intra-temporally), and consumption smoothing takes place among the households (inter-temporally). Idiosyncratic risk sharing within the family is based on an income smoothing contract. There are two sectors in the model, the regular sector and the underground sector, and the smoothing comes from the underground sector, which is countercyclical with respect aggregate GDP. The paper shows that the simulated disaggregated consumption and income series (that are the regular and underground consumption flows) are more sensitive to exogenous changes in sector-specific productivity and tax rates than regular and underground income flows, and that this picture is reversed when the aggregate series are considered.-

Moonlighting Production, Tax Rates and Capital Subsidies

Informal firms play a crucial role in both developing and developed countries, and there is evidence of a larger presence of moonlighting firms over ghost firms. The former are firms that operate simultaneously in the official and unofficial sectors, whereas the ghost firms undertake their production only underground. In order to deal with this evidence, through an ad-hoc assumption we represent a specific technological advantage of moonlighting firms over ghost firms, modelled through an aggregate-capital externality. In this setting we examine the steady state effect of fiscal policies aimed to support firms, in particular investment subsidies and tax allowances, on firm size and underground production. Among the main results, a tax cut (rise), induces the moonlighting firm to engage in more (less) official production. Contrary to the presumption that subsidies may also be useful for pushing firms to operate over ground, in the presence of moonlighting technology, the incentives to improve capital stock turn out to be counterproductive in that they increase the unofficial economy overall.formal and informal sectors, capital investment, tax exemptions

The Role of "Skill Enhancing Trade" in Brazil: Some Evidence from Microdata

Brazil was characterised by a marked process of trade liberalisation in the 1990s, resulting in a dramatic increase in the volumes of exports and imports since the year 2000. Over the same period, the relative demand for skilled labour has increased substantially. To investigate whether these two simultaneous phenomena are linked is the purpose of this paper. More in particular, this study focuses on the impact of trade openness and technology transfer on the relative demand for skilled labour in Brazilian manufacturing firms, using a unique panel database (resulting from merging three different statistical sources) of Brazilian manufacturing firms over the period 1997-2005. Descriptive statistics show that the increase in the relative demand for skilled labour was mainly driven by the within-industry variation, supporting the hypothesis that technology (and in particular technological transfer from richer countries) may have played a role in determining the skill-upgrading of Brazilian manufacturing firms. The econometric results further support this hypothesis. Indeed, the estimations show that domestic capital is a complement of the skilled workers and that imported capital goods clearly act as a skill-enhancing component of trade. Hence, our results support the view that embodied technological change through the importation of capital goods has involved a clear skill-biased impact in Brazilian manufacturing.skill-enhancing trade, skill-bias, panel data, Brazil

21st Century Projections of High Streamflow Events in the UK and Germany

Radiative effects of anthropogenic changes in atmospheric composition are expected to enhance the hydrological cycle leading to more frequent and intense floods. To explore if there will be an increased risk of river flooding in the future, 21st century projections under global warming scenarios of High Streamflow Events (HSEs) for UK and German rivers are carried out, using a model that statistically relates large-scale atmospheric predictors - 850 hPa Geopotential Height (GPH850) and Integrated Water Vapor Transport (IVT) - to the occurrence of HSEs in one or simultaneously in several streamflow gauges. Here, HSE is defined as the streamflow exceeding the 99th percentile of daily flowrate time series measured at streamflow gauges. For the common period 1960-2012, historical data from 57 streamflow gauges in UK and 61 streamflow gauges in Germany, as well as, reanalysis data of GPH850 and IVT fields, bounded from 90W to 70E and from 20N to 80N are used. The link between GPH850 configurations and HSEs, and more precisely, identification of the GPH850 states potentially able to generate HSEs, is performed by a combined Kohonen Networks (Self Organized Map, SOM) and Event Syncronization approach. Complex network and modularity methods are used to cluster streamflow gauges that share common GPH850 configurations. Then a model based on a conditional Poisson distribution, in which the parameter of the Poisson distribution is assumed to be a nonlinear function of GPH850 and IVT, allows for the identification of GPH850 state and threshold of IVT beyond which there is the HSE highest probability. Using that model, projections of 21st century changes in frequency of HSEs occurrence in UK and Germany are estimated using the simulated fields of GPH850 and IVT from selected GCMs belonging to the Coupled Model Inter-comparison Project Phase 5 (CMIP5). Among the different GCMs, those are selected whose retrospective predictor fields have consistent statistics with the corresponding reanalysis data

A Combined Atmospheric Rivers and Geopotential Height Analysis for the Detection of High Streamflow Event Probability Occurrence in UK and Germany

The role of atmospheric rivers (ARs) in inducing High Streamflow Events (HSEs) in Europe has been confirmed by numerous studies. Here, we assume as HSEs the streamflows exceeding the 99th percentile of daily flowrate time series measured at streamflow gauges. Among the indicators of ARs are: the Integrated Water Vapor (IWV) and Integrated Water Vapor Transport (IVT). For both indicators the literature suggests thresholds in order to identify ARs. Furthermore, local thresholds of such indices are used to assess the occurrence of HSEs in a given region. Recent research on ARs still leaves room for open issues: 1) The literature is not unanimous in defining which of the two indicators is better. 2) The selection of the thresholds is based on subjective assessments. 3) The predictability of HSEs at the local scale associated with these indices seems to be weak and to exist only in the winter months. In order to address these issues, we propose an original methodology: (i) to choose between the two indicators which one is the most suitable for HSEs predictions; (ii) to select IWT and/or IVT (IVT/IWV) local thresholds in a more objective way; (iii) to implement an algorithm able to determine whether a IVT/IWV configuration is inducing HSEs, regardless of the season. In pursuing this goal, besides IWV and IVT fields, we introduce as further predictor the geopotential height at 850 hPa (GPH850) field, that implicitly contains information about the pattern of temperature, direction and intensity of the winds. In fact, the introduction of the GPH850 would help to improve the assessment of the occurrence of HSEs throughout the year. It is also plausible to hypothesize, that IVT/IWV local thresholds could vary in dependence of the GPH850 configuration. In this study, we propose a model to statistically relate these predictors, IVT/IWV and GPH850, to the simultaneous occurrence of HSEs in one or more streamflow gauges in UK and Germany. Historical data from 57 streamflow gauges in UK and 61 streamflow gauges in Germany, as well as reanalysis data of the 850 hPa geopotential fields bounded from 90W to 70E and from 20N to 80N are used. The common period is 1960 to 2012. The link between GPH850 and HSEs, and more precisely, the identification of the GPH850 states potentially able to generate HSEs is performed by a combined Kohonen Networks (Self Organized Map, SOM) and Event Syncronization approach. Complex network and modularity methods are used to cluster streamflow gauges that share common GPH850 configurations. Then a model based on a conditional Poisson distribution is carried out, in which the parameter of the Poisson distribution is assumed to be a nonlinear function of GPH850 state and IVT/ IWV. This model allows for the identification of the threshold of IVT/IWV beyond which there is the HSE highest probabilit