Optimal Taxation and Indeterminacy in the Uzawa-Lucas Model with Sector-specific Externalities

Documento de trabajoIn an extended Uzawa-Lucas model that includes labor-leisure decisions, sector-speci c externalities in the production of goods generate a market failure relative to the socially optimal decisions. We show that, regardless of whether agents value pure or effective units of leisure, the first best solution can be attained either by using a time-varying subsidy to the human capital employed to produce goods or by combining consumption and labor income taxes with this type of subsidy. Moreover, when leisure is de ned as raw time, we fi nd that even when there is global determinacy, local indeterminacy may arise for several combinations of the parameters that are consistent with empirical evidence and previous literature. Importantly, under local indeterminacy the optimal policy does not ensure that identical economies will converge to the same per capita levels. Thus, not only the size and type of human capital externalities are important for optimal policy but also the indeterminacy aspects are relevant.Financial support from the Spanish Ministry of Economy and Competitiveness through grant ECO2012-31626 and Departamento de Educación, Política Lingüística y Cultura del Gobierno Vasco (IT869-13) is gratefully acknowledged

Foreign Aid Linked to Infrastructure and/or Pollution Abatement

This paper studies the macroeconomic effects of a permanent increase in foreign aid in a model that takes into account environmental quality. We develop a dynamic equilibrium model in which both public investment in infrastructure and environmental protection can be financed using domestic resources and international aid programs. The framework considers four scenarios for international aid: untied aid,aid fully tied to infrastructure, aid fully tied to abatement, and aid equally tied to both types of expenditures. We find that the effects of the transfers may depend on (i) the structural characteristics of the recipient country (the elasticity of substitution in production and its dependence on environment and natural resources) and on (ii) how recipient countries distribute their public expenditure. These results underscore the importance of these factors when deciding how and to what extent to tie aid to infrastructure and/or pollution abatement.Financial support from the Spanish Ministry of Economy and Competitiveness through grant ECO2012-31626 and Departamento de Educación, Política Lingüística y Cultura del Gobierno Vasco (IT869-13) is gratefully acknowledged

Two-part tariff licensing mechanisms

Most of the patent licensing agreements that are observed include royalties, in particular per-unit or ad valorem royalties. This paper shows that in a differ entiated duopoly that competes á la Cournot the optimal contract for an internal patentee always includes a positive royalty. Moreover, we show that the patentee would prefer to use ad valorem royalties rather than per-unit royalties when goods are complements or when they are substitutes and the degree of differentiation is suffciently low. The reason is that by including an ad valorem royalty in the licensing contract the patentee can commit strategically to be more (less) aggressive when goods are complements (substitutes) since his licensing revenues become increasing with the price of output of his rival. As a result, licensing may hurt consumers although it always increases social welfare.Financial support from grant ECO 2009-07939 and the Departamento de Educación, Univer- sidades e Investigación del Gobierno Vasco IT-223-07 is gratefully acknowledged

Royalty Licensing

Published as an article in: Economics Letters, 2010, vol. 107, issue 2, pages 284-287.A patent provides its holder the monopolist´s right to sell licenses that allow the use of new technology. Empirically, most of the patent licensing agreements that are observed include royalties, in particular per unit or ad valorem royalties. The theoretical literature, however, has focused most of its attention to attempt to explain the presence of royalties by considering per-unit royalties. In this paper, we show that an internal patentee may prefer licensing by means of ad valorem royalties rather than per-unit royalties and other licensing mechanism traditionally considered in the literature. The reason is that by including an ad valorem royalty in the licensing contract the patentee can commit strategically to be less aggressive since its licensing revenues become increasing in the price of output. As a result, licensing hurts consumers.Financial support from grant SEJ 2006-05596 and from IT-223-07 is gratefully acknowledged

Royalty Licensing

Published as an article in: Economics Letters, 2010, vol. 107, issue 2, pages 284-287.patent licensing, royalty, Cournot duopoly

Optimal Taxation and Indeterminacy in the Uzawa-Lucas Model with Sector-specific Externalities

Documento de trabajoIn an extended Uzawa-Lucas model that includes labor-leisure decisions, sector-speci c externalities in the production of goods generate a market failure relative to the socially optimal decisions. We show that, regardless of whether agents value pure or effective units of leisure, the first best solution can be attained either by using a time-varying subsidy to the human capital employed to produce goods or by combining consumption and labor income taxes with this type of subsidy. Moreover, when leisure is de ned as raw time, we fi nd that even when there is global determinacy, local indeterminacy may arise for several combinations of the parameters that are consistent with empirical evidence and previous literature. Importantly, under local indeterminacy the optimal policy does not ensure that identical economies will converge to the same per capita levels. Thus, not only the size and type of human capital externalities are important for optimal policy but also the indeterminacy aspects are relevant.Financial support from the Spanish Ministry of Economy and Competitiveness through grant ECO2012-31626 and Departamento de Educación, Política Lingüística y Cultura del Gobierno Vasco (IT869-13) is gratefully acknowledged

Foreign Aid Linked to Infrastructure and/or Pollution Abatement

This paper studies the macroeconomic effects of a permanent increase in foreign aid in a model that takes into account environmental quality. We develop a dynamic equilibrium model in which both public investment in infrastructure and environmental protection can be financed using domestic resources and international aid programs. The framework considers four scenarios for international aid: untied aid,aid fully tied to infrastructure, aid fully tied to abatement, and aid equally tied to both types of expenditures. We find that the effects of the transfers may depend on (i) the structural characteristics of the recipient country (the elasticity of substitution in production and its dependence on environment and natural resources) and on (ii) how recipient countries distribute their public expenditure. These results underscore the importance of these factors when deciding how and to what extent to tie aid to infrastructure and/or pollution abatement.Financial support from the Spanish Ministry of Economy and Competitiveness through grant ECO2012-31626 and Departamento de Educación, Política Lingüística y Cultura del Gobierno Vasco (IT869-13) is gratefully acknowledged

Estudios de postgrado y perspectivas salariales: una aplicación de la teoría del capital humano

El objetivo de este trabajo es estimar la demanda de educación de postgrado en nuestro país. concretamente, se contrasta si las expectativas de ganancias salariales son un factor determinante en la decisión de continuar invirtiendo en educación tras la finalización de los estudios universitarios. Además, se analiza si el factor de descuento, representado principalmente por la situación financiera de la familia en la que habita el individuo, y el momento del ciclo en el que se encuentra la economía (para lo cual se acude a la tasa de paro global), son factores adicionales que afectan a dicha decisión. Para ello, se hace uso del modelo presentado por Willis y Rosen (1979) quienes, a su vez, se basan en la idea de la teoría del capital humano. Los resultados obtenidos son consistentes con lo que la teoría predice, de tal modo que la esperanza de un salario futuro mayor, una menor tasa de descuento y un momento de recesión de la economía al finalizar la licenciatura afectan positivamente a la probabilidad de realizar estudios de postgrado

Estudios de postgrado y perspectivas salariales: una aplicación de la teoría del capital humano

El objetivo de este trabajo es estimar la demanda de educación de postgrado en nuestro país. concretamente, se contrasta si las expectativas de ganancias salariales son un factor determinante en la decisión de continuar invirtiendo en educación tras la finalización de los estudios universitarios. Además, se analiza si el factor de descuento, representado principalmente por la situación financiera de la familia en la que habita el individuo, y el momento del ciclo en el que se encuentra la economía (para lo cual se acude a la tasa de paro global), son factores adicionales que afectan a dicha decisión. Para ello, se hace uso del modelo presentado por Willis y Rosen (1979) quienes, a su vez, se basan en la idea de la teoría del capital humano. Los resultados obtenidos son consistentes con lo que la teoría predice, de tal modo que la esperanza de un salario futuro mayor, una menor tasa de descuento y un momento de recesión de la economía al finalizar la licenciatura afectan positivamente a la probabilidad de realizar estudios de postgrado