Raising revenue with transaction taxes in Latin america - or is it better to tax with the devil you know?

In recent years, various Latin American governments have resorted to taxes on bank debits and financial transactions as alternative ways of raising revenue. Considerable interest has developed in understanding the consequences of such reforms. The author constructs a dynamic general equilibrium model to assess the size of distortions and other quantitative implications associated with a transaction tax. The distinctive feature of the model is the non-neutrality property of the tax in the sense that it distorts the structure of relative prices of intermediate transactions, giving rise to tax"pyramidation."The effective tax rate ultimately borne by the economy is shown to depend on the complexity of the transaction structure. Calibrated for Latin America, the model finds that, contrary to existing evidence and conventional wisdom, a transaction tax is not a particularly burdensome levy in terms of economic growth and efficiency costs. The model also shows that if a government can credibly commit itself to an announced two-step reform in which it first uses a transaction tax temporarily and then replaces it with any other conventional tax, this policy will improve economic welfare relative to a tax reform where a consumption tax (or a labor income tax or a capital earnings tax) is exclusively used from the start to raise the required additional revenue.Public Sector Economics&Finance,Economic Theory&Research,Labor Policies,Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research,Environmental Economics&Policies,Public Sector Economics&Finance,Banks&Banking Reform,Economic Growth

Fiscal space for investment in infrastructure in Colombia

For the evaluation of macroeconomic policies Colombian authorities rely heavily, if not exclusively, on the operational framework known as the Financial Programming Model developed by the International Monetary Fund in the 1950s. Based on this static framework, the formulation of fiscal policy in the country, just as in various Latin American countries, focuses primarily on fiscal deficit and gross debt targets. However, the type of fiscal policy advice derived from it is not useful for understanding the asset-creating nature and the inter-temporal tradeoffs involved in public investment decisions. The author develops a perfect foresight, dynamic small open economy model to provide an alternative framework for fiscal analysis and policy purposes. He shows that the two competing frameworks deliver differing paths for the expected behavior of the Colombian economy. He then uses the proposed framework to study the likely consequences of using public capital spending to achieve deficit targets since, in addition to an already high public debt, in the years ahead unfunded pension obligations will put enormous pressure on the Colombian government's solvency. The results indicate that public capital compression is costly in terms of foregone growth and very ineffective in achieving fiscal consolidation. The adoption of fiscal rules such as the golden rule or the permanent balance rule to shield public investment from undue budgetary pressures makes little sense in the presence of sustainability concerns. The author shows that a transitory capital spending increase is not self-amortizing in the long run; hence an extra peso of public capital spending deteriorates the inter-temporal fiscal position. A permanent increase largely pays for itself in terms of additional tax revenue but this effect is offset by a deterioration of infrastructure user charges, as long as public prices are determined competitively.Economic Theory&Research,Environmental Economics&Policies,Banks&Banking Reform,Public Sector Economics&Finance,Economic Stabilization

The size and effectiveness of automatic fiscal stabilizers in Latin America

This paper measures the size of automatic fiscal revenue stabilizers and evaluates their role in Latin America. It introduces a relatively rich tax structure into a dynamic, stochastic, multi-sector small open economy inhabited by rule-of-thumb consumers (who consume their wages and do not save or borrow) and Ricardian households to study the stabilizing properties of different parameters of the tax code. The economy faces multiple sources of business cycle fluctuations: (1) world capital market shocks; (2) world business cycle shocks; (3) terms of trade shocks; (4) government spending shocks; and (5) nontradable and (6) tradable sector technology innovations. Calibrating the model economy to a typical Latin American economy allows the evaluation of its ability to mimic the region's observed business cycle frequency properties and the assessment of the quantitative relationship between tax code parameters, business cycle forcing variables, and business cycle behavior. The model captures many of the salient features of Latin America's business cycle facts and finds that the degree of smoothing provided by the automatic revenue stabilizers-described by various properties of the tax system-is negligible. Simulation results seem to suggest an invariance property for middle-income countries: the amplitude of the business cycle is independent of the tax structure. And government size-measured by the GDP ratio of government spending-plays the role of an automatic stabilizer, but its smoothing effect is very weak.Economic Theory&Research,Fiscal Adjustment,Economic Stabilization,Intergovernmental Fiscal Relations and Local Finance Management,Inequality

Implicaciones macroeconómicas de la tributación monetaria

Este artículo explora los efectos macroeconómicos de la tributación monetaria, es decir, del hecho de que el dinero se usa en el pago de impuestos. Con base en tres modelos que exhiben crecimiento en el estado estacionario determinístico, se muestra aquí como la inflación tiene mayores efectos en el crecimiento y el bienestar que los hasta ahora estimados en la literatura sobre los efectos reales de la inflación. Con tributación monetaria, la inflación reduce directamente la tasa de retorno de la inversión. A frecuencias de ciclos económicos, la introducción de la tributación monetaria no deteriora la habilidad del modelo para replicar las características básicas de las fluctuaciones económicas en los Estados Unidos; pero no replica la correlación entre las horas trabajadas (empleo) y productividad y la volatilidad relativa de las horas trabajadas. A diferencia de la literatura existente, este artículo desarrolla un modelo con tributación monetaria y efecto liquidez, el cual mejora la habilidad del modelo para reproducir los mencionados hechos básicos del mercado laboral en los Estados Unidos

NUEVA EVIDENCIA SOBRE ECONOMIAS DE ESCALA EN LA BANCA COLOMBIANA

El presente trabajo buscar el grado en que los costos bancarios y las funciones de producción muestran economías de escala superando algunas de las limitaciones de los trabajos que se han realizado para el caso colombiano. en particular se introduce una nueva definición de producto bancario y se estiman formas funcionales más flexibles.BANCOS,

Minimización de la tardanza ponderada total en talleres de manufactura aplicando colonia de hormigas

This research studies the minimization of the total weighted tardiness in the job shop scheduling problem (JSSP). This problem is NP ­ strongly Hard and to solve it constructively an implementation of the metaheuristic Ant Colony is proposed. The generated solution is based on the principal of optimal solution that is found in the set of active schedules. The values of different parameters were determined by experimental design. The performance of the proposed heuristic was compared with priority rules and meta-heuristics such as Tabu Search and Simulating Annealing in the solution of instances 5×5, 6×6 y 10×10 that had their optimal solution reported in the literature. Key words: meta-heuristics, ants colony optimization, tabu search, job hhop scheduling.Se estudio el job shop scheduling problem (JSSP) con el objetivo de minimizar la tardanza ponderada total. Este es un problema NP­Hard en el sentido fuerte y para resolverlo constructivamente se propone una implemen- tación de la meta-heurística colonia de hormigas. Las soluciones generadas se basan en el principio que la secuencia óptima se encuentra en el conjunto de los programas activos. El valor de los diferentes parámetros de colonia de hormigas se determino por diseño de experimentos. Se comparo el desempeño del algoritmo propuesto con los resultados obtenidos a través de reglas de despacho y las meta-heurísticas búsqueda tabú y recocido simulado, en la solución de problemas de tamaño 5×5, 6×6 y 10×10 de los cuales se han reportado las soluciones óptimas

Longitudinal Connectomes as a Candidate Progression Marker for Prodromal Parkinson’s Disease

Parkinson’s disease is the second most prevalent neurodegenerative disorder in the Western world. It is estimated that the neuronal loss related to Parkinson’s disease precedes the clinical diagnosis by more than 10 years (prodromal phase) which leads to a subtle decline that translates into non-specific clinical signs and symptoms. By leveraging diffusion magnetic resonance imaging brain (MRI) data evaluated longitudinally, at least at two different time points, we have the opportunity of detecting and measuring brain changes early on in the neurodegenerative process, thereby allowing early detection and monitoring that can enable development and testing of disease modifying therapies. In this study, we were able to define a longitudinal degenerative Parkinson’s disease progression pattern using diffusion magnetic resonance imaging connectivity information. Such pattern was discovered using a de novo early Parkinson’s disease cohort (n = 21), and a cohort of Controls (n = 30). Afterward, it was tested in a cohort at high risk of being in the Parkinson’s disease prodromal phase (n = 16). This progression pattern was numerically quantified with a longitudinal brain connectome progression score. This score is generated by an interpretable machine learning (ML) algorithm trained, with cross-validation, on the longitudinal connectivity information of Parkinson’s disease and Control groups computed on a nigrostriatal pathway-specific parcellation atlas. Experiments indicated that the longitudinal brain connectome progression score was able to discriminate between the progression of Parkinson’s disease and Control groups with an area under the receiver operating curve of 0.89 [confidence interval (CI): 0.81–0.96] and discriminate the progression of the High Risk Prodromal and Control groups with an area under the curve of 0.76 [CI: 0.66–0.92]. In these same subjects, common motor and cognitive clinical scores used in Parkinson’s disease research showed little or no discriminative ability when evaluated longitudinally. Results suggest that it is possible to quantify neurodegenerative patterns of progression in the prodromal phase with longitudinal diffusion magnetic resonance imaging connectivity data and use these image-based patterns as progression markers for neurodegeneration

Optimal commodity price stabilization over the business cycle

This paper develops a model to study the design, characterization and dynamic implications of stabilization policies in a dynamic general equilibrium model of the business cycle for an economy tainted by the Dutch disease. The model incorporates a stabil

Commodity booms, dutch disease, and real business cycles in a small open economy: the case of coffee in Colombia

This paper proposes a dynamic,stochastic, multisector growth model which integrates the real business cycle literature and booming sector and Dutch Disease economics to analyze fluctuations, resource allocation and relative price changes in small open (developing) economies subject to terms of trade shocks. The model is consistent whith aggregate and sectorial cyclical behavior of this class of economies, and rationalizes as an efficient outcome the symptoms of Dutch Disease (temporary deindustrialization and appreciation of the real exchange rate) which are sometimes judged to be suboptimal responses and as the rationale for government intervention in developing countries. It is also found that commodity price stabilization policies do not significantly affect the cyclical pattern of fluctuations and that their welfare benefits are second orden