The Dynamics of Optimal Taxation when Human Capital is Endogenous

This paper characterizes the dynamics of Pareto efficient income taxes in a dynamic economy with human capital accumulation. I extend the tools and insights developed by Mirrlees (1971) into a dynamic framework. I follow Diamond (1998) by assuming that there are no income effects on labor supply. If the government can freely borrow and save, I show that i) the problem of finding efficient allocation can be decomposed into two relatively simple stages and ii) if agents have access to capital market (with zero tax on capital), the efficient allocations may be in some cases implemented in a competitive equilibrium by using history independent income taxes. I compute the sequence of optimal income taxes that implement the optimum and show that they marginal income taxes tend to decrease over time and that the gains from adjustment of human capital are about 12 times larger than the static gains from labor supply adjustmentOptimal taxation, private information, human capital

Dynamic Managerial Compensation: A Variational Approach

We study the optimal dynamics of incentives for a manager whose ability to generate cash flows changes stochastically with time and is his private information. We show that distortions (aka, wedges) under optimal contracts may either increase or decrease over time. In particular, when the manager's risk aversion and ability persistence are small, distortions decrease, on average, over time. For sufficiently high degrees of risk aversion and ability persistence, instead, distortions increase, on average, with tenure. Our results follow from a novel variational approach that permits us to tackle directly the "full program," thus bypassing some of the difficulties of the "first-order approach" encountered in the dynamic mechanism design literature

Chapter 15 Magnetic Properties of Soils

Iron-containing minerals, i.e., magnetic minerals, constitute an intimate part of a soil. These can be derived from the parent rock from which the soil developed, or can be formed in situ, or can be deposited from the atmosphere, originating from natural or anthropogenic sources. Recently, measurement of the magnetic properties of soils have found an increased use in detecting pollution, as a substitute of more time-consuming chemical techniques. The current chapter provides a brief background of the basic concepts of magnetism in order to define the parameters that are used in studies of contamination of soils. A detailed discussion is provided about the various classes of magnetic materials together with the methods that are used to measure magnetic parameters. The effects of several factors such as the presence of iron oxides, mineralogy, and grain size on the magnetic parameters are discussed, as well as, the dependence of the soil magnetic susceptibility on parent lithology, climate, oxidation/reduction, organic matter, topography, sediment source, particle size, and time. The relation between soil contamination, by heavy metals and organic pollutants, and the magnetic properties of soils are detailed based on recent scientific findings. Finally, the function of magnetic bacteria in the presence of contaminants and their impact on natural soil remediation as well as the measurement of a soil\u27s magnetic properties is discussed

Microbial activities in forest soils exposed to chronic depositions from a lignite power plant

Atmospheric emissions of fly ash and SO2 from lignite-fired power plants strongly affect large forest areas in Germany. The impact of different deposition loads on the microbial biomass and enzyme activities was studied at three forest sites (Picea abies (L.) Karst.) along an emission gradient of 3, 6, and 15 km downwind of a coal-fired power plant (sites Ia, II, and III, respectively), representing high, moderate and low emission rates. An additional site (site Ib) at a distance of 3 km from the power plant was chosen to study the influence of forest type on microbial parameters in coniferous forest soils under fly ash and SO2 emissions. Soil microbial biomass C and N, CO2 evolved and activities of L-asparaginase, L-glutaminase, beta-glucosidase, acid phosphatase and arylsulfatase (expressed on dry soil and organic C basis) were determined in the forest floor (L, Of and Oh horizon) and mineral top soil (0-10 cm). The emission-induced increases in ferromagnetic susceptibility, soil pH, concentrations of mobile (NH4NO3 extractable) Cd, Cr, and Ni, effective cation exchange capacity and base saturation in the humus layer along the 15 km long transect significantly (P<0.05) reflected the effect of past depositions of alkaline fly ash. Soil microbial and biochemical parameters were significantly (P<0.05) affected by chronic fly ash depositions. The effect of forest type (i.e. comparison of sites la and Ib) on the studied parameters was generally dominated by the deposition effect. Alkaline depositions significantly (P<0.05) decreased the microbial biomass C and N, microbial biomass C-to-N ratios and microbial biomass C-to-organic C ratios. Microbial respiration, metabolic quotient (qCO(2)) and the activities of L-asparaginase, L-glutaminase, beta-glucosidase, acid phosphatase and arylsulfatase were increased by long-term depositions from the power plants. Acid phosphatase had the highest specific (enzyme activities expressed per unit organic C) activity values among the enzymes studied and arylsulfatase the lowest. The responses of the microbial biomass and soil respiration data to different atmospheric deposition loads were mainly controlled by the content of organic C and cation exchange capacity, while those of enzyme activities were governed by the soil pH and concentrations of mobile heavy metals. We concluded that chronic fly ash depositions decrease litter decomposition by influencing specific microbial and enzymatic processes in forest soils. (C) 2004 Elsevier Ltd. All rights reserved