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

Quarter-filled spin density wave states with long-range Coulomb interaction

Spin density wave (SDW) states at quarter-filling, which coexist with charge density wave (CDW) states, have been examined where the critical temperature is calculated for an extended Hubbard model with long range repulsive interactions. Within the mean-field theory, it is shown that the first order transition occurs with decreasing temperature for interactions located around the boundary between SDW state and CDW state.Comment: 4 pages, 5 figures, Proceedings of CREST International Workshop (Nagoya, Japan, 24-26 January, 2000), submitted to J. Phys. Chem. Solid

National Origin Differences in Wages and Hierarchical Positions - Evidence on French Full-Time Male Workers from a matched Employer-Employee Dataset

This paper estimates the differences in wages and hierarchical positions that can be attributed to national origin in France. Our data come from a matched employer-employee wage survey performed in 2002. The business survey provides very reliable wage data which are matched to many individual-level variables collected in a household survey. The sample of male full-time workers is decomposed into three sub-samples according to the parents' birthplace (France, North Africa and Southern Europe). The large number of executives in the sample allows us to perform a switching regression model of wage determination and occupational employment. We adapt and extend existing decomposition methods to this framework: while usual methods only take care of selection issues, we develop here a methodology which also properly takes into account composition effects due to differences in hierarchical positions when comparing mean wage gaps. Moreover the method we use only requires model estimation on the reference population and therefore yields more precise results when the sample size of the potentially discriminated group is small. Our results show no wage discrimination but a certain degree of occupational segregation yielding composition effects. Moreover, differences in the returns to some of the individual characteristics including higher diplomas might reveal mechanisms of statistical discrimination on the labor market.immigration, discrimination, wage gap, France

Fund Managers' Contracts and Financial Markets' Short-Termism

This paper considers the problem faced by long-term investors who have to delegate the management of their money to professional fund managers. Investors can earn profits if fund managers collect long-term information. We investigate to what extent the delegation of fund management prevents long-term information acquisition, inducing short-termism. We also study the design of long-term fund managers' compensation contracts. Absent moral hazard, short-termism arises only because of the cost of information acquisition. Under moral hazard, fund managers' compensation endogenously depends on short-term price efficiency (because of the need to smooth fund managers' consumption), thereby on subsequent fund managers' information acquisition decisions. The latter are less likely to be present on the market if information has already been acquired initially, giving rise to a feedback effect. The consequences are twofold: First, this increases short-termism. Second, short-term compensation for fund managers depends in a non-monotonic way on long-term information precision. We derive predictions regarding fund managers' contracts and financial markets efficiency.

Toward an Objective-Driven System of Smart Labor Migration Management

This policy note offers motivation and a game plan for achieving a coherent and mutually beneficial labor migration system.1 It argues that migrant workers may make important contributions to economic growth and development in both sending and receiving countries if they find enabling conditions. To achieve a potential win-win-win situation requires (1) a sustainable migration management system that takes into account the interests of the various stakeholders involved; (2) a clear identification and articulation of objectives and interests in migration by key stakeholders, based on a common conceptual framework for migration and development; (3) regional and bilateral coordination mechanisms to balance these (potentially divergent) objectives and to reach compromise under labor agreements and policies; and (4) effective, evidence-based polices and public and private sector interventions to achieve the objectives that are known and applied at the levels of sending, receiving, returning, and circulating.labor, migration, remittances, migrant workers, development, growth, circulating, immigration, mobility, immigration policy

Optimal decision bounds for probabilistic population codes and time varying evidence

Decision making under time constraints requires the decision maker to trade off between making quick, inaccurate decisions and gathering more evidence for more accurate, but slower decisions. We have previously shown that, under rather general settings, optimal behavior can be described by a time-dependent decision bound on the decision maker’s belief of being correct (Drugowitsch, Moreno-Bote, Pouget, 2009). In cases where the reliability of sensory information remains constant over time, we have shown how to design diffusion models (DMs) with time-changing boundaries that feature such behavior. Such theories can be easily mapped onto simple neural models of decision making with two perfectly anti-correlated neurons, where they predict the existence of a stopping bound on the most active neurons. It is unclear however how the stopping bound would be implemented with more realistic neural population codes, particularly when the reliability of the evidence changes over time.
Here we show that, under certain realistic conditions, we can apply the theory of optimal decision making to the biologically more plausible probabilistic population codes (PPCs; Ma et al. 2006). Our analysis shows that, with population codes, the optimal decision bounds are a function of the neural activity of all neurons in the population, rather than a previously postulated bound on its maximum activity. This theory predicts that the bound on the most active neurons would appear to shift depending on the firing rate of other neurons in the population, a puzzling behavior under the drift diffusion model as it would wrongly suggest that subjects change their stopping rule across conditions. This theory also applies to the case of time varying evidence, a case that cannot be handled by drift diffusion models without unrealistic assumptions

Clustering Complex Zeros of Triangular Systems of Polynomials

This paper gives the first algorithm for finding a set of natural $\epsilon$-clusters of complex zeros of a triangular system of polynomials within a given polybox in $\mathbb{C}^n$, for any given $\epsilon>0$. Our algorithm is based on a recent near-optimal algorithm of Becker et al (2016) for clustering the complex roots of a univariate polynomial where the coefficients are represented by number oracles. Our algorithm is numeric, certified and based on subdivision. We implemented it and compared it with two well-known homotopy solvers on various triangular systems. Our solver always gives correct answers, is often faster than the homotopy solver that often gives correct answers, and sometimes faster than the one that gives sometimes correct results.Comment: Research report V6: description of the main algorithm update

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