The paper proposes a simple equilibrium model of venture capital, entrepreneurship and innovation. Venture capitalists not only finance but also advise start-up entrepreneurs and thereby add value to new firms. The paper demonstrates how a productive and active VC industry boosts innovation driven growth.
The overlapping generations model with life-time uncertainty is capable of generating unfamiliar, nonmonotonic adjustment phenomena that are attributed to a transitory savings motive. Slowly falling (increasing) wages create transitory savings disincentives which vanish in the long run when wage profiles become stationary again. Such a transitory savings component comes on top of a base component created by the permanently operating long-run savings incentives, and it easily gives rise to overshooting adjustment. Assets and consumption may even move first in a direction opposite to the implied long-run changes.
Eine Unternehmenssteuerreform wirkt sich über das Investitions- und Finanzierungsverhalten der Unternehmen aus. Die Unternehmenssteuerreform II reduziert die wirtschaftliche Doppelbelastung von Dividenden beim Anteilseigner und verbessert so die Neutralität zwischen Selbst- und Anteilsfinanzierung. Sie dürfte aber je nach Variante nur einen moderaten und zeitlich verzögerten Wachstumseffekt erzielen.
The paper presents a one good two country computable general equilibrium model with overlapping generations to evaluate intertemporal and international effects from tax reform. Model treatment of household and firm behavior is firmly rooted in the microeconomic theory of intertemporal choice. The paper considers the effects from the implementation of a cash flow income tax which was shown to be neutral with respect to intertemporal decisions. The paper compares the effects in closed and open economies. In solving for transition paths to new intertemporal equilibria, I also discuss the generational welfare consequences of various arrangements that affect the transition paths.
In Ländern mit hohem Staatsanteil ist eine ausgabenseitige Haushaltssanierung wesentlich wirksamer als höhere Steuern. Die wachstumsrelevanten Ausgaben müssen jedoch erhalten bleiben.
Venture capitalists not only finance but also advise and thereby add value to young entrepreneurial firms. The prospects of venture capital backed firms thus depend on joint efforts of entrepreneurs and informed venture capitalists, and are subject to double moral hazard. For this reason, managerial support and the number of portfolio companies tend to be inefficiently low. This paper investigates how tax policy can possibly contribute to a more active style of venture capital investments. An optimal tax policy is derived that moves the private equilibrium towards a first best allocation.
