The Optimal Tax Treatment of Housing Capital in the Neoclassical Growth Model

In a dynamic setting, housing is both an asset and a consumption good.But should it be taxed like other forms of consumption or like other forms of saving?We consider the optimal taxation of the imputed rent from owner housing within a version of the neoclassical growth model.We find that the optimal tax rate on the imputed rent is quite sensitive to the constraints imposed on the other available tax rates.In general, it is not optimal to tax the imputed rent at the same rate as the business capital income

Electrophysiological evidence of illusory audiovisual speech percept in human infants

How effortlessly and quickly infants acquire their native language remains one of the most intriguing questions of human development. Our study extends this question into the audiovisual domain, taking into consideration visual speech cues, which were recently shown to have more importance for young infants than previously anticipated [Weikum WM, Vouloumanos A, Navarra J, Soto-Faraco S, Sebastián-Gallés N, Werker JF (2007) Science 316:1159]. A particularly interesting phenomenon of audiovisual speech perception is the McGurk effect [McGurk H, MacDonald J (1976) Nature 264:746–748], an illusory speech percept resulting from integration of incongruent auditory and visual speech cues. For some phonemes, the human brain does not detect the mismatch between conflicting auditory and visual cues but automatically assimilates them into the closest legal phoneme, sometimes different from both auditory and visual ones. Measuring event-related brain potentials in 5-month-old infants, we demonstrate differential brain responses when conflicting auditory and visual speech cues can be integrated and when they cannot be fused into a single percept. This finding reveals a surprisingly early ability to perceive speech cross-modally and highlights the role of visual speech experience during early postnatal development in learning of the phonemes and phonotactics of the native language

The Impact of Pension System Reform on Projected Old-Age Income: The Case of Poland

This paper analyses the distributional effects of the Polish old-age pension reform introduced in 1999. Following a benchmark Mincer earnings equation, and using a newly developed microsimulation model we project future pension benefits for males born in years 1969-1979. We find that inequality of predicted first pension benefits measured by the Gini coefficient increases from 0.119 to 0.165 for cohorts of men retiring between 2036 and 2046. The observed increased inequality of pension benefits is due to the decreasing share of initial capital that is based on a more generous DB formula in the total accumulated pension capital. At the same time, inequality in replacements rates decreases due to a stronger link between contributions paid through the entire working life and pension benefits