Tax Policy and Entrepreneurship in the Presence of Asymmetric Information in Capital Markets

This paper considers the implications of asymmetric information in capital markets for entrepreneurial entry and tax policy. In many countries, governments subsidize the creation of new firms. One possible justification for these subsidies is that capital markets for the financing of new firms do not function properly. We analyse this issue by assuming that entrepreneurs need outside financing for their projects and know more about the quality of their projects than outside investors. Entrepreneurs have the choice between carrying out their entrepreneurial projects or working as an employee. It turns out that asymmetric information in capital markets leads to too much rather than too little entrepreneurial entry. Therefore, the ptimal tax policy should discourage rather than subsidize entrepreneurial entry. We also nalyse the welfare effects of project screening and show that there is too much screening. Our policy conclusion is that subsidies for the foundation of firms must be based on reasons other than informational asymmetries in capital markets.

The role of decarboxylation reactions during the initiation of the methanol-to-olefins process

The mechanism for direct Csingle bondC bond formation during the initiation of the methanol-to-olefins (MTO) process is still under discussion. Carbon dioxide formation is often observed during initiation, but there are only few investigations into the role of decarboxylation. We investigate decarboxylation pathways in the H-SSZ-13 zeolite from methanol to olefins via direct carbon–carbon coupling. Additionally, the rate-determining steps were recomputed in the H-ZSM-5 and H-SAPO-34 zeolite. Gibbs free energy barriers were calculated using periodic density functional theory in combination with CCSD(T) calculations on cluster models. For H-SSZ-13, kinetic batch reactor simulations were performed. We found for H-SSZ-13 that pathways via decarboxylation reactions are equally likely as previously computed pathways including decarbonylation mechanisms (also known as ketene or CO pathway). Lactones formed from ketenes and formaldehyde were identified as the main intermediates. The decarboxylation mechanism has similar barriers in H-SSZ-13, H-ZSM-5, and H-SAPO-34, while the barriers for methylation and decarbonylation reactions are significantly lower in H-ZSM-5 and higher in H-SAPO-34. Decarboxylation reactions of lactones could explain experimentally detected carbon dioxide during the initial phase of the MTO process

3D Face Tracking and Texture Fusion in the Wild

We present a fully automatic approach to real-time 3D face reconstruction from monocular in-the-wild videos. With the use of a cascaded-regressor based face tracking and a 3D Morphable Face Model shape fitting, we obtain a semi-dense 3D face shape. We further use the texture information from multiple frames to build a holistic 3D face representation from the video frames. Our system is able to capture facial expressions and does not require any person-specific training. We demonstrate the robustness of our approach on the challenging 300 Videos in the Wild (300-VW) dataset. Our real-time fitting framework is available as an open source library at http://4dface.org

Forecasting Global Equity Indices Using Large Bayesian VARs

This paper proposes a large Bayesian Vector Autoregressive (BVAR) model with common stochastic volatility to forecast global equity indices. Using a dataset consisting of monthly data on global stock indices the BVAR model inherently incorporates co-movements in the stock markets. The time-varying specification of the covariance structure moreover accounts for sudden shifts in the level of volatility. In an out-of-sample forecasting application we show that the BVAR model with stochastic volatility significantly outperforms the random walk both in terms of root mean squared errors as well as Bayesian log predictive scores. The BVAR model without stochastic volatility, on the other hand, underperforms relative to the random walk. In a portfolio allocation exercise we moreover show that it is possible to use the forecasts obtained from our BVAR model with common stochastic volatility to set up simple investment strategies. Our results indicate that these simple investment schemes outperform a naive buy-and-hold strategy. (authors' abstract)Series: Department of Economics Working Paper Serie