From the Global Income Tax To the Dual Income Tax: Recent Tax Reforms in The Nordic Countries.

The paper discusses the recent drive towards a system of "dual" income taxation (DIT) in the Nordic countries. The pure version of this system combines progressive taxation of labour and transfer incomes with a proportional tax on income from capital at a level equal to the corporate income tax rate. The paper considers the motives for the introduction of this new income tax system, ranging from rather abstract theoretical arguments to very pragmatic practical considerations. While the Nordic DIT system violates the principles of the conventional personal income tax, it is argued that it may in fact be more in line with the philosophy of a true Haig-Simons comprehensive income tax. It is also suggested that the DIT system may cause fewer distortions to ressource allocation than the conventional income tax. On the debit side, the paper points out several practical problems of taxing income from small enterprises under the differentiated income tax.

Systematic Derivation of Amplitude Equations and Normal Forms for Dynamical Systems

We present a systematic approach to deriving normal forms and related amplitude equations for flows and discrete dynamics on the center manifold of a dynamical system at local bifurcations and unfoldings of these. We derive a general, explicit recurrence relation that completely determines the amplitude equation and the associated transformation from amplitudes to physical space. At any order, the relation provides explicit expressions for all the nonvanishing coefficients of the amplitude equation together with straightforward linear equations for the coefficients of the transformation. The recurrence relation therefore provides all the machinery needed to solve a given physical problem in physical terms through an amplitude equation. The new result applies to any local bifurcation of a flow or map for which all the critical eigenvalues are semisimple i.e. have Riesz index unity). The method is an efficient and rigorous alternative to more intuitive approaches in terms of multiple time scales. We illustrate the use of the method by deriving amplitude equations and associated transformations for the most common simple bifurcations in flows and iterated maps. The results are expressed in tables in a form that can be immediately applied to specific problems.Comment: 40 pages, 1 figure, 4 tables. Submitted to Chaos. Please address any correspondence by email to [email protected]

Grey power and public budgets: Family altruism helps children, but not elderly

International trade may influence income distribution. This study takes as a starting point the puzzling development of relative wages between skilled and unskilled labor in South Africa. Wage inequality decreased during the sanctions period and increased with trade liberalization post Apartheid, contrary to the standard trade theory prediction for an economy with comparative advantage in unskilled labor. We calibrate a Ramsey growth model for South Africa to clarify and quantify the distributive effects of trade barriers, and offer an understanding of the South African experience based on the interaction between openness and skill biased technical change. The dependence on foreign technology increases with openness and gives higher degree of skill bias, which may explain the observed relative wage path. Our model calibration is an alternative to econometric studies separating between trade and technology effects. A counterfactual analysis shows that without sanctions and protectionism during the 1980s the skilled-unskilled wage gap is about 13% larger on average. The quantitative results imply that an increase in trade as share of GDP of 10% points generates an increase in the wage gap of 6.6%. The analysis reveals a tradeoff between growth and distribution.

Regional Growth Policy in Denmark - An Assessment of the Role of Innovation As an Instrument in Regional Policy

A recent study for the Danish government has identified innovation as one of the major drivers of regional competitiveness in Denmark. Innovation and the capacity to innovate are crucial factors in the development of a firm and its ability to adapt to changes in the external environment. In particular changes in the international production system with increasing out-sourcing of physical production from Western Europe has highlighted the need for an alternative economic base in many regions. As a consequence, attention has been on the role of innovation policy in economic policy in general and regional development in particular. The aim of this paper is to analyze the interaction between the actors in the innovative environment (i.e. the firm, advisory and research institution) and the external environment as a part of a broader network of innovative relations covering intra-firm as well as extra-firm relations and processes. The project covers the following aspects: • In the first part of the paper concepts and policies of innovation are discussed with regard to their ability to move the economy toward higher growth. • The second section provides a brief overview of regional convergence and disparities in Denmark in the last decade, and compares with the trends in a broader European perspective. • The next section summarizes the findings of a recent study of the regional system of innovation in Western Denmark, and provides a critical review of the role of innovation in the process of economic restructuring in the perspective of growing internationalization in many branches. Based on this assessment the future perspectives of regional policy in Denmark are discussed on the background of the ongoing reorganization of local and regional government in general, and the introduction of five regional growth-forums in particular.

Economies of Scale in Biomass Gasification Systems

Renewable energy sources, such as biomass, may replace the use of fossil fuels and have therefore an active role in reducing carbon dioxide emissions. One conversion technology for energy production from biomass is gasification. The gasification options can differ with regard to scale, biomass fuel, energetic efficiencies, investment and operational costs, as well as energy carriers produced. In this study at atmospheric indirectly fired gasifier is used and the energy carrier produced is methanol. The whole bioenergy chain is described in this study, from when the biomass is extracted in the forest until the produced methanol is distributed to the consumer. Five system-components are distinguished in the chain: biomass extraction and pre-treatment, transportation of biomass, biomass conversion to methanol, transportation of methanol and distribution of methanol. The aim of this paper is to classify the costs and energy efficiencies of the system components when the scale of the system changes. The methanol plants described have a biomass input between 10 MW and 1000 MW. The scale of the gasification plant influences the unit cost of the produced methanol, and large-scale production plants will have the advantage in this respect. On the other hand, large-scale plants are likely to have higher transportation costs per unit biomass transported as a result of longer transportation distances. When using the input variables described for the model the methanol unit cost decreases as plant size increases. The total unit cost of methanol is found to decrease from about 20.6 Euro/GJ MeOH for a 10 MW plant to about 12.5 Euro/GJ MeOH for a 200 MW plant. The unit costs stabilize for plant sizes between 200 MW and 1000 MW, but do however continue to decrease to about 11 Euro/GJ MeOH for a 1000 MW plant. Included in the unit methanol cost are 50 kilometer (km) additional biomass transport by truck and 100 km methanol transport by train and 1000 km methanol transport by ship. This result depend on many different input variables, such as biomass, plant and transportation costs. In order to assess the influence the different variables produce on the final methanol unit cost, a sensitivity analysis is carried out. The energy efficiencies for the different scaled biomass pathways are found to be more or less scale independent. Assuming that produced methanol is transported independent of plant size and using the same transportation means and distances, transportation of biomass is the only scale dependent factor. For truck transportation of biomass this energy consumption varies from 0.1% of the total bioenergy for a 10 MW plant to 1.2% of the total input bioenergy for a 1000 MW plant. Two geographical areas are analyzed using the model. An area in the north-west of Spain demonstrates the model for a large-scale methanol plant (935 MW biomass input) and an area in the west of Greece demonstrates a model for a medium-sized methanol plant (380 MW biomass input)

Regional impacts of economic transition: From manufacturing to service and knowledge based development: Long term trends and recent Danish experiences in the Wind Energy industry.

Most mature industrial economies faced the challenge of severe structural changes in the last decades. Traditional manufacturing moved from the metropolitan and central regions to the periphery. Later the value chain in most industries changed toward knowledge intensive and service activities. This tendency has been reinforced by the trend toward globalization and recently by the impacts of the financial crisis. The aim of the paper is to sketch the long term trends of regional and industrial development in Denmark; and to identify the drivers of economic and geographical change in the production system Denmark belongs to. The starting hypothesis is that the long term transition is driven by a combination of domestic and international factors. The first part provides an overview of the Danish economy in an international perspective focusing on structural change (i.e. the relative size of primary, secondary and tertiary activities) and the impacts of the internationalization. The second section provides an analysis of the regional structural change in Denmark with special attention on the impacts of globalization and the changes in the international production system. The main focus is on the fact that the global financial crisis seemingly has been a catalyst of a process of change, with probably irreversible impacts on the geography of economic activities in Denmark. The third part digs deeper into the processes of regional and functional transformation based on a case study of the Danish wind power industry facing fierce global competition and the challenges of international relocation, with heavy regional consequences for employment. Regional impacts in particular in Western Denmark have been significant both with regards to employment and value-added. The functional and competence profile of the industry in Denmark has transformed, reducing the content of physical production. Currently two tendencies are identified; the move from a production to a skill and knowledge based industry integrated in a global value chain, and an increasing importance of construction and service provision for production capacities in offshore locations. Keywords: International interdependence – regional and structural change – a new functional division of production – toward a service based economy

Escape angles in bulk chi(2) soliton interactions

We develop a theory for non-planar interaction between two identical type I spatial solitons propagating at opposite, but arbitrary transverse angles in quadratic nonlinear (or so-called chi(2)) bulk media. We predict quantitatively the outwards escape angle, below which the solitons turn around and collide, and above which they continue to move away from each other. For in-plane interaction the theory allows prediction of the outcome of a collision through the inwards escape angle, i.e. whether the solitons fuse or cross. We find an analytical expression determining the inwards escape angle using Gaussian approximations for the solitons. The theory is verified numerically.Comment: V1: 4 pages, 4 figures. V2: Accepted for publication in Physical Review E. 5 pages, 4 figures. Fig. 2 changed to be for fixed soliton width and to show soliton power. New simple relations in terms of power and pahse mismatch are include

First estimate of the time delay in HE 1104-1805

We present first results from five years of spectrophotometric monitoring of the bright double QSO and gravitational lens HE 1104-1805. The quasar has varied considerably over this time, while the emission line fluxes appear to have remained constant. We have constructed monochromatic continuum light curves for components A and B, finding that B leads the variability. A quantitative analysis with the Pelt method gives a best estimate for the light travel time delay of about 0.73 years, although a value as low as 0.3 cannot yet be excluded. We discuss possible models for the QSO-lens configuration and use our measured time delay to predict the redshift of the lens, z_d. Finding that most likely z_d < 1, we can rule out the hitherto favoured values of z_d = 1.32 or 1.66. A new candidate is an absorption system at z=0.73, but the lens could also be an elliptical not detected in absorption.Comment: 4 pages, 4 figures, accepted for A&A, Letters to the edito