Preferences over Capital Income versus Labor Income Taxation

Empirical papers show that labor income and capital income are differently taxed all over the world. We investigate whether this may correspond to individual preferences. We tackle this question in an overlapping generations general equilibrium model with heterogeneous agents: young versus old and low skilled versus high skilled individuals. Taxes finance unemployment benefits and government consumption. High skilled agents prefer capital income taxes, while young unskilled and old agents prefer labor income taxation.Income taxation; Majority voting

The Macroeconomic Consequences of Public Finances : A Potential Explanation for the Reduction in Effective Retirement Age

In order to study the macroeconomic effects of public finances, we construct a computable general equilibrium model with overlapping generations, endogenous growth and endogenous retirement age. We calibrate this model on Belgian data. We show that it is able to replicate the observed increase in labor income tax and a substantial part of the drop in the retirement age recorded over the last fifty years. In addition, we find that the sharp increase in government expenditures financed by labor income taxation and the building up of a high level of public debt may have significantly contributed to this evolution. Tis model further suggests that a policy aimed towards a reduction in the public debt as well as a pension reform implying a lower taxation on old workers would constitute politically feasible alternatives to reduce the negative impact on aging by generating an endogenous increase of the retirement age.Retirement; pensions; tax-transfer policies

EU Representation and the Governance of the International Monetary Fund

The introduction of the euro and closer coordination of economic policies in the European Union are fuelling a debate on Europe's representation in the international financial institutions. A single EU representation at the International Monetary Fund (IMF) would affect the balance of power in the institution through a fundamental reallocation of quotas and executive directors among its membership. A reduction in the number of European executive directors, and in the total voting power of Europe and in its contribution to the Fund's general resources, could go hand in hand with an increase in the Union's impact on IMF decision-making. Such a change would also weaken the cooperative nature of the Fund through a reduction in the number and impact of mixed constituencies

Les générations futures : un souci pour la politique budgétaire ?

A quel rythme réduire la dette publique ? Quel budget consacrer aux soins de santé ? Et quel mode de financement de la sécurité sociale adopter face au vieillissement de la population ? Ces choix mettent en balance l’intérêt de différentes générations. Nous identifions les gagnants et les perdants de différentes options politiques.dette publique générations imbriquées pensions soins de santé politique budgétaire taxation indirecte financement de la sécurité sociale justice inter-générationelle

On the Optimality of PAYG Pension Systems in an Endogenous Fertility Setting

In order to help in designing an accurate pension reform, we determine the optimal resource allocation in an endogenous fertility model generating a demographic transition. Extending Samuelson’s (1975) work in such a setting, we analyze the problem of the interiority of the optimal solution and discuss the serendipity theorem. We then characterize the decentralization of the first best, showing that a pension policy linking pension benefits to the number of children constitutes an optimal social security program able to restore both the optimal capital stock and the optimal rate of pupulation growth as a unique instrument. We also show that neither a Beveridgean pension scheme nor a Bismarckian one can decentralize the first best.demographic transition;fertility;pensions;golden rule

Iron-binding by dissolved organic matter in the Western Tropical South Pacific Ocean (GEOTRACES TONGA cruise GPpr14)

Iron (Fe) is an essential micronutrient for phytoplankton growth, but its scarcity in seawater limits primary productivity across much of the ocean. Most dissolved Fe (DFe) in seawater is complexed with Fe-binding organic ligands, a poorly constrained fraction of dissolved organic matter (DOM), which increase Fe residence time and impact Fe bioavailability. Here, we present the conditional concentration (LFe) and binding-strength (log KFe'Lcond) of Fe-binding ligands in the Western Tropical South Pacific (WTSP) Ocean during the GEOTRACES TONGA cruise (GPpr14). The transect crossed the Lau basin, a region subject to shallow hydrothermal Fe inputs that fuel intense diazotrophic activity, the oligotrophic South Pacific gyre, and the Melanesian basin. Organic speciation was analyzed by competitive ligand exchange adsorptive cathodic stripping voltammetry (CLE-AdCSV) using salicylaldoxime at 25 µM. We found a high mean LFe of 5.2 ± 1.2 nMeqFe (n = 103) across the entire transect, predominantly consisting of intermediate strength L2 ligands (84%; mean log KFe'Lcond of 11.6 ± 0.4), consistent with humic-like substances. DFe correlated with the humic-like component of the fluorescent DOM (HS-like FDOM), yet the electroactive Fe-binding humic-like substances (LFeHS) accounted for only 20 ± 13% of LFe in the mixed layer and 8 ± 6% in deep waters. Ligands were in large excess compared to DFe (mean excess ligand eLFe = 4.6 ± 1.1 nMeqFe), suggesting poor stabilization of DFe inputs. High LFe (up to 9 nMeqFe) in samples close to hydrothermal sites could be due to detoxification strategies from plankton communities toward hydrothermally-fueled toxic trace metals other than Fe, with an apparent dilution of the DOM from the Lau basin into neighboring regions. We also observed a different peak potential of the Fe salicylaldoxime complex detected by CLE-AdCSV between the Lau and Melanesian basins, and between surface and deep waters. To our knowledge, this change in potential has not previously been reported; whether this represents a novel detection of specificities in DOM composition merits further investigation. Competition between Fe and competing metals for ligand binding sites could favor DFe oxidation and precipitation near hydrothermal vents and explain the absence of strong Fe stabilization in the WTSP

Macroeconomic consequences of the Welfare State

Doctorat en sciences économiques (ECON 3)--UCL, 200

The Macroeconomic Consequences of Public Finances : A potential Explanation for the Reduction in Effective Retirement Age

In order to study the macroeconomic effects of public finances, we construct a computable general equilibrium model with overlapping generations, endogenous growth and endogenous retirement age. We calibrate this model on Belgian data. We show that it is able to replicate the observed increase in labor income tax and a substantial part of the drop in the retirement age recorded over the last fifty years. In addition, we find that the sharp increase in government expenditures financed by labor income taxation and the building up of a high level of public debt may have significantly contributed to this evolution. This model further suggests that a policy aimed towards a reduction in the public debt as well as a pension reform implying a lower taxation on old workers would constitute politically feasible alternatives to reduce the negative impact on aging by generating an endogenous increase of the retirement age

Pensions and Voting Equilibria in an Overlapping Generation Model with Heterogeneous Agents.

We model how a Beveridgean pay-as-you-go pension system may be supported by a majority of heterogeneous voters in a general equilibrium OLG model. The introduction of heterogeneity creates intragenerational transfers among workers which may lead to different optimal taxation rates within young individuals and to a positive taxation rate as outcome of the political choice. We underline the general equilibrium effects of a PAYG pension system on the interest rate, on future wages and therefore on the future level of pensions. We obtain an equilibrium tax rate and pension level that do not depend on population growth rate and on the capital stock