Implicit tax co-ordination under repeated policy interactions

In the context of a stylised gaine theoretical framework of capital tax competition, we show that when repeated policy interactions are associated to a systematic punishment of the deviating policymaker, a coordinated outcome can be the solution to the non cooperative tax game. This resuit suggests that explicit forms of policy coordination, such as a centralised tax authority, could in fact be largely unnecessary.Policy coordination, international fiscal issues

Self-control and savings

We reconsider the well-established paradigm of a rational individual's choice of a consumption schedule, building on the idea that human beings devote resources to withstand their desire for immediate consumption, i.e. to become more patient, thereby making less remote the pleasure derived from deferred consumption. We construct an infinite-horizon model of a small open economy, in which individuals can accumulate a stock of personal capital that reduces the discount on future consumption. Personal capital captures the effect of a conumer's past experience and choices on his future utilities. Our main results are: i) when individuals are heterogenous with respect to ability to become patient all individuals exhibit the same rate of time preference in the long run; ii) effort is rewarded in the long run to the extent that individuals who need to make more effort to become patient are wealthier and enjoy a higher level of utility bin the steady state. The latter result stems from the complementarity between personal capital and deferred consumption. JEL Classification: E13

Implicit tax co-ordination under repeated policy interactions

In the context of a stylised game theoretical framework of capital tax competition, we show that when repeated policy interactions are associated to a systematic punishment of the deviating policymaker, a co-ordinated outcome can be the solution to the non co-operative tax game. This result suggests that explicit forms of policy co-ordination, such as a centralised tax authority, could in fact be largely unnecessary. JEL Classification: E61, H87International Fiscal Issues, Policy Co-ordination

Learning Temporal Contexts and Priming-Preparation Modes for Pattern Recognition

The system presented here is based on neurophysiological and electrophysiological data. It computes three types of increasingly integrated temporal and probability contexts, in a bottom-up mode. To each of these contexts corresponds an increasingly specific top-down priming effect on lower processing stages, mostly pattern recognition and discrimination. Contextual learning of time intervals, events' temporal order or sequential dependencies and events' prior probability results from the delivery of large stimuli sequences. This learning gives rise to emergent properties which closely match the experimental data.Institut national de la santé et de la recherche médicale; Ministère de la Défense Nationale (DGA/DRET 911470/AOOO/DRET/DS/DR); Consejo Nacional de Ciencia y Tecnología (63462

An Integrated Neural Network-Event-Related Potentials Model of Temporal and Probability Context Effects on Event Categorization

We present a neural network that adapts and integrates several preexisting or new modules to categorize events in short term memory (STM), encode temporal order in working memory, evaluate timing and probability context in medium and long term memory. The model shows how processed contextual information modulates event recognition and categorization, focal attention and incentive motivation. The model is based on a compendium of Event Related Potentials (ERPs) and behavioral results either collected by the authors or compiled from the classical ERP literature. Its hallmark is, at the functional level, the interplay of memory registers endowed with widely different dynamical ranges, and at the structural level, the attempt to relate the different modules to known anatomical structures.INSERM; NATO; DGA/DRET (911470/A000/DRET/DS/DR

Landau levels in quasicrystals

Two-dimensional tight-binding models for quasicrystals made of plaquettes with commensurate areas are considered. Their energy spectrum is computed as a function of an applied perpendicular magnetic field. Landau levels are found to emerge near band edges in the zero-field limit. Their existence is related to an effective zero-field dispersion relation valid in the continuum limit. For quasicrystals studied here, an underlying periodic crystal exists and provides a natural interpretation to this dispersion relation. In addition to the slope (effective mass) of Landau levels, we also study their width as a function of the magnetic flux per plaquette and identify two fundamental broadening mechanisms: (i) tunneling between closed cyclotron orbits and (ii) individual energy displacement of states within a Landau level. Interestingly, the typical broadening of the Landau levels is found to behave algebraically with the magnetic field with a nonuniversal exponent.Comment: 14 pages, 9 figure

Fiscal sustainability and public debt in an endogenous growth model

This paper investigates fiscal sustainability in an overlapping generations economy with endogenous growth coming from human capital formation through educational spending. We assess how budgetary imbalances affect economic dynamics and the outlook for economic growth, thereby providing a rationale for fiscal rules ensuring sustainability. Our results show that the appropriate response of fiscal policy to temporary shocks is not trivial in the absence of fiscal rules. Fiscal rules allow for a timely reaction, thereby avoiding possibly disruptive fiscal adjustment in the future: the more adjustment is delayed, the larger is its necessary scale. We perform a rough calibration of the model to simulate the effects of a demographic shock (change in the population growth rate) under different fiscal policy scenarios. JEL Classification: E62, H63, H55, O41, E17Fiscal sustainability, overlapping generations, public debt

Intergenerational altruism and neoclassical growth models

This paper surveys intergenerational altruism in neoclassical growth models. It first examines Barro's approach to intergenerational altruism, whereby successive generations are linked by recursive altruistic preferences. Individuals have an altruistic concern only for their children, who in turn also have altruistic feelings for their own children. The conditions under which the Ricardian equivalence (debt neutrality) theorem applies are specified. The effectiveness of fiscal policy is further analysed in the context of an economy populated by heterogeneous families differing with respect to their degree of intergenerational altruism. Other forms of altruism, referred to as ad hoc altruism, are also examined, along with their implications for fiscal policy. JEL Classification: E13, D64, E62, C60altruism, fiscal policy, Neoclassical general aggregative models

Public pensions and growth

This paper investigates the relationship between the size of an unfunded public pension system and economic growth in an overlapping generation economy, in which altruistic parents finance the education of their children and leave bequests. Unlike the existing literature, we model intergenerational altruism by assuming that children's income during adulthood is an argument of parental utility. Unfunded public pensions can promote growth when families face liquidity constraints preventing them from investing optimally in the education of their children. We consider two alternative ways of financing a public pension system, either by levying social contributions in a lump-sum manner or in proportion to labour income. We find that there is no case for unfunded public pensions in economies where bequests are operative. By contrast, there exists a growth-maximising size of the public pension system in economies where bequests are not operative and individuals are sufficiently patient JEL Classification: H55, I20, D91Education, Growth, Public pension

Debt stabilizing fiscal rules

Unstable government debt dynamics can typically be corrected by various fiscal instruments, like appropriate adjustments in government spending, public transfers, or taxes. This paper investigates properties of state-contingent debt targeting rules which link stabilizing budgetary adjustments around a target level of long-run debt to the state of the economy. The paper establishes that the size of steady-state debt is a key determinant of whether it is possible to find a rule of this type which can be implemented under all available fiscal instruments. Specifically, considering linear feedback rules, the paper demonstrates that there may well exist a critical level of debt beyond which this is no longer possible. From an applied perspective, this finding is of particular relevance in the context of a monetary union with decentralized fiscal policies. Depending on the level of long-run debt, there might be a conflict between a common fiscal framework which tracks deficit developments as a function of the state of the economy and the unrestricted choice of fiscal policy instruments at the national level. JEL Classification: E63, H62fiscal regimes, overlapping generations