infonet-economy

In this paper I develop a formal theory of campaign communications. Voters have priors about the quality of candidates' policies in the different policy issues and about the issues' relative importance. Candidates spend time or money (TV ads, public speeches, etc.) in an effort to influence voters' decision at the ballot. Influence has two simultaneous effects: (i) it...

This paper studies the effect of trade facilitation on vertical firm structure using plant-level data from Switzerland. Based on the Business Census and the Input-Output table, we first calculate a binary measure of vertical integration for all plants registered in Switzerland. We then estimate the effect of a Mutual Recognition Agreement with the European Union on the plants'...

This paper develops a theoretical model of multinational firms with an internal capital
market. Main reasons for the emergence of such a market are tax avoidance through
debt shifting and the existence of institutional weaknesses and financial frictions across host countries. The model serves to derive hypotheses regarding the role of local versus foreign characteristics...

Without financing frictions, profit taxes reduce investment by their effect on the user cost of capital. With financing constraints, investment becomes sensitive to cash-flow. In this situation, even small taxes impose first order welfare losses, andACE and cash-flow tax systems are no longer neutral. When banks become active and provide monitoring services in addition to finance, an...

The private provision of public goods generally suffers from two types of efficiency failures: sorting problems (the wrong individuals contribute) and quantity problems (an inefficient amount is provided). Embedding the provision game into a contest that rewards larger contributions with higher probabilities of winning a prize may remedy such failures. Applications include tenure...

This paper discusses transition strategies that might be used in moving from an
income tax to consumption based business taxes in the form of an R-base cash-flow
tax, an R+F-base tax, or an ACE (allowance for corporate equity) tax. While these three taxes have attractive neutrality properties, moving from the status quo to a new system often involves a diffi cult trade-...

Moving towards a fiscal union does not address the problems of divergence in Europe. Given cultural heterogeneity and diverse preferences, fiscal policy should remain under national sovereignty while important regulatory power is assigned to the Union. The paper argues that more credible fiscal rules combined with tighter surveillance reduce negative policy spillovers. A better...

This paper provides a theory of incorporation and taxation that emphasizes
the role of the corporate legal form in facilitating access to external capital
and the potential advantages of limited liability. Incorporation relaxes financing
constraints and makes corporations larger than comparable non-corporate
firms. For the same reason, a tax on corporations...

This paper provides a theory of incorporation and taxation that emphasizes
the role of the corporate legal form in facilitating access to external capital
and the potential advantages of limited liability. Incorporation relaxes financing
constraints and makes corporations larger than comparable non-corporate
firms. For the same reason, a tax on corporations...