The Liouville property and random walks on topological groups

We study harmonic functions and Poisson boundaries for Borel probability measures on general (i.e., not necessarily locally compact) topological groups, and we prove that a second-countable topological group is amenable if and only if it admits a fully supported, regular Borel probability measure with trivial Poisson boundary. This generalizes work of Kaimanovich--Vershik and Rosenblatt, confirms a general topological version of Furstenberg's conjecture, and entails a characterization of the amenability of isometry groups in terms of the Liouville property for induced actions. Moreover, our result has non-trivial consequences concerning Liouville actions of discrete groups on countable setsComment: 24 pages, no figures; v2: referee report taken into account, Proposition 4.2 generalized, minor error in the statement of Lemma 4.5 corrected, some references and background material added, 26 pages, final version to appear in Commentarii Mathematici Helvetic

Corruption and the Shadow Economy: A Structural Equation Model Approach

The relationship between corruption and the shadow economy is not clear. Theoretically, they either substitute or complement each other – exhibiting either a negative or positive relationship. This paper – using a structural equation model with two latent variables – extracts information on various dimensions of corruption and the shadow economy to contribute to the debate on their relationship. It presents empirical evidence of a positive relationship between the shadow economy and corruption. The results show that the shadow economy influences corruption more than corruption influences the shadow economy.shadow economy, corruption, SEM models

MIMIC Models, Cointegration and Error Correction: An Application to the French Shadow Economy

The analysis of economic loss attributed to the shadow economy has attracted much attention in recent years by both academics and policy makers. Often, multiple indicators multiple causes (MIMIC) models are applied to time series data estimating the size and development of the shadow economy for a particular country. This type of model derives information about the relationship between cause and indicator variables and a latent variable, here the shadow economy, from covariance structures. As most macroeconomic variables do not satisfy stationarity, long run information is lost when employing first differences. Arguably, this shortcoming is rooted in the lack of an appropriate MIMIC model which considers cointegration among variables. This paper develops a MIMIC model which estimates the cointegration equilibrium relationship and the error correction short run dynamics, thereby retaining information for the long run. Using France as our example, we demonstrate that this approach allows researchers to obtain more accurate estimates about the size and development of the shadow economy.shadow economy, tax burden, regulation, unemployment, cointegration, error correction models, MIMIC models

Monetary Commitment, Institutional Constraints and Inflation: Empirical Evidence for OECD Countries since the 1970s

Central bank independence (CBI) is a very important precondition for price stability. However, the empirical evidence for a correlation between both is relatively weak. In this paper, this weakness is countered with a) an extended measure of monetary commitment, which includes well-known criteria for CBI and external criteria such as convertibility and exchange rate regimes and b) the argument that monetary commitment can grant price stability best if it is backed by an adequate assignment of economic policy. An empirical assessment with data from four decades confirms the crucial role of monetary commitment for price stability.central bank independence, price stability, monetary commitment

MIMIC Models, Cointegration and Error Correction: An Application to the French Shadow Economy

The analysis of economic loss attributed to the shadow economy has attracted much attention in recent years by both academics and policy makers. Often, multiple indicators multiple causes (MIMIC) models are applied to time series data estimating the size and development of the shadow economy for a particular country. This type of model derives information about the relationship between cause and indicator variables and a latent variable, here the shadow economy, from covariance structures. As most macroeconomic variables do not satisfy stationarity, long run information is lost when employing first differences. Arguably, this shortcoming is rooted in the lack of an appropriate MIMIC model which considers cointegration among variables. This paper develops a MIMIC model which estimates the cointegration equilibrium relationship and the error correction short run dynamics, thereby retaining information for the long run. Using France as our example, we demonstrate that this approach allows researchers to obtain more accurate estimates about the size and development of the shadow economy.shadow economy, tax burden, regulation, unemployment, cointegration, error correction models, MIMIC models

Health Care Reform: Separating Insurance from Income Redistribution

Most systems of health care financing in EU member states currently include elements of income redistribution. The paper analyzes the effects of shifting this kind of redistribution to the tax system and argues that this reform could create two types of efficiency gains. On the expenditure side, it would facilitate the adoption of more incentive-compatible insurance contracts, for example through the introduction of copayment schemes. On the revenue side, income redistribution through the general tax system is likely to imply a shadow price of public funds that is lower than if redistribution is carried out through wage-based insurance contributions.health care finance, income redistribution

Size and Development of the Shadow Economy and of Do-it-yourself Activities in Germany

This paper presents the first MIMIC (multiple indicator multiple causes) model estimate of the size and development of the shadow economy and of do-it-yourself (DIY) activities in Germany from 1970 to 2005. By 2005, they reached a level of about 17% and 4.94%. While the shadow economy has regularly increased over the years, DIY activities – though quite sizeable – have remained more or less constant since the early 1990s. The driving forces for the shadow economy are regulation and tax burden whereas for DIY activities, the level of unemployment is the main factor.shadow economy, do-it-yourself activities, tax burden, regulation, domestic currency in circulation, unemployment, MIMIC models

Raman cross section of spin ladders

We demonstrate that a two-triplet resonance strongly renormalizes the Raman spectrum of two-leg spin ladders and moreover suggest this to be the origin of the asymmetry of the magnetic Raman continuum observed in CaV2O5.Comment: 2 pages, 1 figur