Environmental policy negotiations, transboundary pollution and lobby groups in small open economies

This paper analyzes the consequences of lobby group activity for policy outcomes in economies with transboundary pollution and international environmental policies. In our framework, international environmental policies are characterized as pollution taxes determined in a negotiation between two countries. We find, among other things, that the presence of local lobbying tends to reduce the level of pollution taxes. We also find that an increase in the environmental concern (i.e. stronger preferences for a clean environment) may reduce the pollution tax in both countries. It is also possible that increased environmental concern in one country reduces the pollution tax in the other country.transboundary pollution; lobbying; taxes; pollution; Nash bargain; negotiations; environmental policy

Dynamics and collapse of local labour markets

Sweden has a tripartial regional structure; with a small number of metropolitan regions comparable in size with those on the European Continent, numerous medium sized and small towns, and in addition vast sparsely populated areas. A Parlamentary Commission has recently suggested a regional policy to cope with the uneven economic growth between these regions. The objective should be to maintain and create well performing local labour markets in all parts of the country. The strategy for achieving this is ”regional enlargement, e g extended commuting areas, increased labour mobility and flexibility. The current appr. one hundred local labour market areas range from the majority, which have less than 25 000 inhabitants, to only a few with more than 200 000. Labour mobility options are severely constrained at the small labour markets with only some one hundred industrial branches present, as compared to the dynamic metropolitan regions with five or six times as many. Population projections reveal that the ageing process will reduce the labour force, particularly threatening both the matching processes and the service provision in small and remote regions. It has to be put into question whether this will be solved by traditional labour market mechanisms. In spite of the globalization process, at most local labour markets an increasing proportion of labour demand will be based on community and household basic services. This leads to the question of the spatial consequences of the emerging polarization of the local versus the globally oriented labour market in the service economy. The paper aims at evaluating the economic returns to alternative strategies for “regional enlargement”, labour mobility and flexibility in the different types of regions found in Nordic countries. The specific meaning of polycentric develoment and of urban-rural partnership in the Nordic context will be discussed. By analysing individual labour market careers recorded in annual gross stream statistics, multidimensional mobility options are calculated and projected for a range of local labour market areas. Methods in spatial planning for evaluating labour market performance are suggested.

Metropolitan and peripheral "Entrepôts" for transitional labour markets

Differences in national welfare systems are reflected in rates of labour market participation for different segments of labour across the EU member states. The Nordic countries have of course long stressed 'full employment as a key labour market objective. The public sector is thus actively used to replace non-paid care with formal jobs. Germany and Austria on the other hand, both of which have less developed childcare systems, in practice treat males as the primary household wage earners. Moreover, several Southern member states consider the 'extended family' to have responsibility for those family members in need, which obviously limits the chances of certain segments of the population from entering or indeed re-entering the regular labour market. However, notwithstanding such differences in emphasis, the notion of 'full employment' eventually found its way onto the agenda of the European Union. The member states were moreover unanimous in their belief that this goal would require significant levels of investment in the areas of employment and social policy. The notion of the activation of all segments of labour is accentuated: e.g. the goal requires at least 50 per cent of people aged over 55 years in the EU to be employed in 2010. A new sub-goal was also set for the employment rate of women, at 10 percentage points below the male/female average. Common standards are also to be established which will enable EU wide comparisons of access to childcare and to care of the elderly. The differences in employment frequencies between EU member states remain large, but on the whole they now seem to be converging. On the other hand, regional differences within member states are reported to be on the increase. As such, the transitional characteristics of the labour market are becoming more transparent: Each transition or career - such as from education to work, from care to work, or from unemployment to work, etc - can be temporary and repetitious. Transitions can now of course occur at almost any time of one's 'working life'. There are theories explaining the nature and scope of such 'transitional' behaviour exhibited by the current labour force, stressing, among other things, the individual choice of life-style, life chances or career options in different places. The other side of the coin of course is that rapid economic restructuring increases the risk for non-voluntary changes in employment status. The regions within member states thus perform as more or less efficient 'entrepôts' for transitional labour markets, depending primarily on diversity and the vitality of its industrial structure and on the demographic structure of the labour force. In general, labour markets in Metropolitan regions are expected to permit higher rates of transition, reflecting more individual freedom of choice, than do small and less diverse LLMs. However, performance is inevitably moderated by the welfare system prevalent in each country. In all probability then it is the countries that have an 'individual' rather than a 'household' focus on labour market participation that will be better prepared for high rates of transition. The purpose of this paper is thus to outline a typology of local labour markets across Europe, reflecting the current range of variation in economic and geographic structures as well as in social policy, and to- discuss feasible mixes of policy measures to help achieve the common European goal of full employment, and to help facilitate transition in all types of regions.

Time Consistency of Fiscal and Monetary Policy: A Solution

This paper demonstrates how time consistency of the Ramsey policy–the optimal fiscal and monetary policy under commitment–can be achieved. Each government should leave its successor with a unique maturity structure for the nominal and indexed debt, such that the marginal benefit of a surprise inflation exactly balances the marginal cost. Unlike in earlier papers on the topic, the result holds for quite a general Ramsey policy, including time varying polices with positive inflation and positive nominal interest rates. We compare our results with those in Persson, Persson, and Svensson (1987), Calvo and Obstfeld (1990), and Alvarez, Kehoe, and Neumeyer (2004).time consistency; Ramsey policy; surprise inflation

Tax or no tax? Preferences for climate policy attributes

Today, many countries around the world respond to the global warming and its consequences with various policy instruments such as e.g. taxes, subsidies, emission permit trading, regulations and information campaigns. In the economic literature, policy instruments have typically been analyzed with respect to efficiency, while little effort has been put on public preferences for these instruments. In this paper, an Internet-based choice experiment is conducted where respondents are asked to choose between two alternative policy instruments that both reduce the emissions of CO2 by the same amount. The policy instruments are characterized by a number of attributes; a technology-effect, an awarenesseffect, cost distribution, geographic distribution and private cost (presented in more detail in the paper). By varying the levels of each of the attributes, respondents indirectly reveal their preferences for these attributes. Half of the respondents are faced with instruments labeled by ‘tax’ and ‘other’, whereas the other half are faced with unlabeled instruments. As for the label, the results show that people dislike the ‘tax’. The results also show that people prefer instruments with a positive effect on environmentally-friendly technology and climate awareness. A progressive-like cost distribution is preferred to a regressive cost distribution, and the private cost is negatively related to the choice. Finally, the results indicate that Swedes want the reduction to take place in Europe but not necessarily in Sweden.preferences; climate policy measures; choice experiment; web-survey

Tax or no tax? Preferences for climate policy attributes

Today, many countries around the world respond to the global warming and its consequences with various policy instruments such as e.g. taxes, subsidies, emission permit trading, regulations and information campaigns. In the economic literature, policy instruments have typically been analyzed with respect to efficiency, while little effort has been put on public preferences for these instruments. In this paper, an Internet-based choice experiment is conducted where respondents are asked to choose between two alternative policy instruments that both reduce the emissions of CO2 by the same amount. The policy instruments are characterized by a number of attributes; a technology-effect, an awareness-effect, cost distribution, geographic distribution and private cost (presented in more detail in the paper). By varying the levels of each of the attributes, respondents indirectly reveal their preferences for these attributes. Half of the respondents are faced with instruments labeled by ‘tax’ and ‘other’, whereas the other half are faced with unlabeled instruments. As for the label, the results show that people dislike the ‘tax’. The results also show that people prefer instruments with a positive effect on environmentally-friendly technology and climate awareness. A progressive-like cost distribution is preferred to a regressive cost distribution, and the private cost is negatively related to the choice. Finally, the results indicate that Swedes want the reduction to take place in Europe but not necessarily in Sweden.preferences; climate policy measures; choice experiment; web-survey

Debt, Cash Flow and Inflation Incentives: A Swedish Example

The fiscal gains from, and hence the political incentives to, an increase in inflation rate of ten percentage points may be substantial: with Swedish data from 1994, these gains would have been an annual real flow of 3-4 percent of GDP, or a capitalized value of nearly 100 percent of GDP. They would mainly have arisen from the nominalistic features of the tax and transfer systems rather than from the traditional sources: seignorage and real depreciation of the public debt. The welfare costs of such an inflation increase would have been even larger, however, and would thus have reduced net welfare. Possible institutional reforms, aimed at making the political costs of inflation more equal to the social costs, are presented and discussed

Entrepreneurial Commercialization Choices and the Interaction between IPR and Competition Policy

This paper examines the interaction between intellectual property protection and competition policy on the choice of entrepreneurs with respect to commercialization as well as the rate of innovation. We find that stronger intellectual property protection makes it more likely that entrepreneurs will commercialize by cooperating with incumbents rather than competing with them. Consequently, we demonstrate that competition policy has a clearer role in promoting a higher rate of innovation in that event. Hence, we identify one reason why the strength of the two policies may be complements from the perspective of increasing the rate of entrepreneurial innovation.Entrepreneurs; Innovation; Commercialization; Intellectual property law; Competition law