Low-Energy Lorentz Invariance in Lifshitz Nonlinear Sigma Models

This work is dedicated to the study of both large-$N$ and perturbative quantum behaviors of Lifshitz nonlinear sigma models with dynamical critical exponent $z=2$ in 2+1 dimensions. We discuss renormalization and renormalization group aspects with emphasis on the possibility of emergence of Lorentz invariance at low energies. Contrarily to the perturbative expansion, where in general the Lorentz symmetry restoration is delicate and may depend on stringent fine-tuning, our results provide a more favorable scenario in the large-$N$ framework. We also consider supersymmetric extension in this nonrelativistic situation.Comment: 28 pages, 4 figures, minor clarifications, typos corrected, published versio

Fiscal policy and the labour market: the effects of public sector employment and wages

I build a dynamic stochastic general equilibrium model with search and matching frictions in order to study the labour market effects of public sector employment and wages. Public sector wages are important to achieve the effcient allocation. High wages induce too many unemployed to queue for public sector jobs, raising unemployment. Following technology shocks, public sector wages should be procyclical and deviations from the optimal policy increase the volatility of unemployment significantly. Another conclusion is that different types of fiscal shocks have opposite effects on labour market variables. I then estimate the parameters of the model for the United States

THE EFFECT OF LABOUR SHARE ON THE NATURAL RATE OF INTEREST: SOME EMPIRICAL EVIDENCE

Standard estimations of Taylor.s (1993) monetary policy rule assume that the natural real rate of interest can be regarded as constant. By contrast, based on Mankiew (2000) theory of Savers and Spenders, we argue that the natural rate is related to the distribution of income between the two types of agents. We show evidence from the U.S., based on a respecication of the Taylor rule proposed by Clarida et al. (2000), that the natural rate of is positively in.uenced by the long-run movements of the labour share in the national income. As the labour share has been falling since 1980s, our results indicate that the natural real interest rate fell from around 6% to around 2% in the beginnings of our decade.

Corporate tax competition and public capital stock

This paper argues that the governmental decisions on corporate tax and public capital stock are not independent. In order to explain this relationship, we have built a general equilibrium model of corporate tax competition where governments supply public capital and compete for corporate profits. When international tax competition drives the statutory tax rate down from 50% to 30%, public capital stock goes down by 10% of GDP. To confirm this relation, we estimate two policy functions for 18 OECD countries. We find that corporate tax rate and public investment are endogenous and that a decline of 20% in the corporate tax rate, driven by competition, reduces public investment by 0.5% to 0.9% of GDP. We also find evidence that there is international competition in both policy tools and that tax competition increases with the degree of openness of the economy

Fiscal Policy and the Labour Market: The Effects of Public Sector Employment and Wages

I build a dynamic stochastic general equilibrium model with search and matching frictions and two sectors in order to study the labour market effects of public sector employment and wages. Public sector wages plays an important role in achieving the efficient allocation. High wages induce too many unemployed to queue for public sector jobs, while if they are low, the government faces recruitment problems. The optimal steady-state wage premium depends mainly on the labour market friction parameters. In response to technology shocks, it is optimal to have procyclical public sector wages. Deviations from the optimal policy can increase the volatility of unemployment significantly. Public sector wage and employment shocks have mixed effects on unemployment. A wage shock raises the unemployment rate, while a reduction in the separations lowers it. Hiring more people can increase or decrease the unemployment rate. All shocks raise the wage and crowd out employment in the private sector. In the empirical part, I employ Bayesian methods to estimate the parameters of the model for the United States. I find that the direct search mechanism between the two sectors is an important element to explain business cycle fluctuations of the labour market variables.public sector employment, public sector wages, unemployment, fiscal shocks

Interactions between Private and Public Sector Wages

We analyse the interactions between public and private sector wages per employee in OECD countries. We motivate the analysis with a dynamic labour market equilibrium model with search and matching frictions to study the effects of public sector employment and wages on the labour market, particularly on private sector wages. Our empirical evidence shows that the growth of public sector wages and of public sector employment positively affects the growth of private sector wages. Moreover, total factor productivity, the unemployment rate, hours per worker, and inflation, are also important determinants of private sector wage growth. With respect to public sector wage growth, we find that, in addition to some market related variables, it is also influenced by fiscal conditions.public wages; private wages; employment.

Corporate Tax Competition and the Decline of Public Investment

The government’s choices of the corporate tax rate and public investment are interdependent. In particular, they both respond positively to the other. Therefore, international tax competition not only drives corporate tax rates to lower levels but might also affect negatively the stock of public capital. We build a general equilibrium model that illustrates the relation between the two variables. We then add an element of international tax competition. Our simulations show that when international tax competition drives the statutory tax rate down from 45% to 30%, public investment is reduced by 0.4% of output at the steady state. The short run effect is three times higher. The second part of our study displays an empirical analysis that corroborates the main outcome of the model. We estimate two policy functions for 21 OECD countries and find that corporate tax rate and public investment are endogenous. More precisely, a decline of 15% in the corporate tax rate reduces public investment by 0.6% to 1.1% of GDP. We also find evidence that international competition operates on both policy tools.tax competition, corporate tax, public investment, public capital