Modelling value-added tax in the presence of multiproduction and differentiated exemptions

We develop a framework for economy-wide modelling of value-added tax systems. Our framework models a number of complexities of VAT systems as they are implemented by tax agencies. In particular, we model multiple rates, multiple exemptions, multiple degrees of refundability across commodity users, and multi-product enterprises. A detailed VAT framework is important for correct modelling of VAT within a general equilibrium model. Such a framework is also of value in correctly representing the distribution of indirect tax payments within the database of a general equilibrium model, a prerequisite of accurate welfare analysis. We use the model to analyse the effects of simplifying Vietnam’s complex VAT system. We simplify the system by moving from three tax rates to one budget-neutral rate, while also removing many discretionary exemptions.value added tax; dynamic CGE model; Vietnam; indirect tax reform

Should Australia be concerned by Beijing’s trade threats: modelling the economic costs of a restriction on imports of Australian coal

A country’s economic dependence on its trade with various other countries is often expressed in terms of trade values and shares. A country’s vulnerability to economic coercion by the countries with which it trades is similarly expressed in such terms. Using the recent issues relating to Australia’s coal trade with China as an example, we propose a better framework for assessing vulnerability to coercive trade instruments. We argue that the capacity for a given export trade to fund real consumption is a superior indicator of economic vulnerability than the simple value of the underlying trade flow. Our framework takes account of trade diversion, foreign capital ownership, the terms of trade, resource mobility, and capital and production tax rates. Using this framework, we demonstrate that the damage from trade sanction is far less than might be expected from a simple focus on the value of the affected trade flow alone

The Economy-wide Impacts of a Rise in the Capital Adequacy Ratios of Australian Banks

Regulators are requiring banks to raise additional equity to finance their activities. The benefits are understood in terms of reducing the risks of another financial crisis. But there are potential costs, including the potential for unanticipated macroeconomic impacts as banks reduce leverage. We use a financial computable general equilibrium model, containing disaggregated treatment of financial agents, to explore the economy-wide consequences of an increase in bank capital adequacy ratios. We find that the macroeconomic consequences are small

Cerebrospinal fluid levels of opioid peptides in fibromyalgia and chronic low back pain

BACKGROUND: The mechanism(s) of nociceptive dysfunction and potential roles of opioid neurotransmitters are unresolved in the chronic pain syndromes of fibromyalgia and chronic low back pain. METHODS: History and physical examinations, tender point examinations, and questionnaires were used to identify 14 fibromyalgia, 10 chronic low back pain and 6 normal control subjects. Lumbar punctures were performed. Met-enkephalin-Arg(6)-Phe(7 )(MEAP) and nociceptin immunoreactive materials were measured in the cerebrospinal fluid by radioimmunoassays. RESULTS: Fibromyalgia (117.6 pg/ml; 85.9 to 149.4; mean, 95% C.I.; p = 0.009) and low back pain (92.3 pg/ml; 56.9 to 127.7; p = 0.049) groups had significantly higher MEAP than the normal control group (35.7 pg/ml; 15.0 to 56.5). MEAP was inversely correlated to systemic pain thresholds. Nociceptin was not different between groups. Systemic Complaints questionnaire responses were significantly ranked as fibromyalgia > back pain > normal. SF-36 domains demonstrated severe disability for the low back pain group, intermediate results in fibromyalgia, and high function in the normal group. CONCLUSIONS: Fibromyalgia was distinguished by higher cerebrospinal fluid MEAP, systemic complaints, and manual tender points; intermediate SF-36 scores; and lower pain thresholds compared to the low back pain and normal groups. MEAP and systemic pain thresholds were inversely correlated in low back pain subjects. Central nervous system opioid dysfunction may contribute to pain in fibromyalgia