In this article, we analyze an economy in which agents vote over immigration policy and redistributive tax policy. We show that natives' preferences over immigration are influenced by the prospect that immigrants will be voting over future tax policy. We also show that changes in the degree of international capital mobility, the distribution of initial capital among natives, the wealth or poverty of the immigrant pool, and the future voting rights and entitlements of immigrants can have dramatic effects on equilibrium immigration and tax policies. Finally, we provide some empirical support for the model's predictions.
What can account for the different contemporaneous inflation experiences of various countries, and of the same country over time? We present an analysis of the determination of inflation from a political economy perspective. We document a positive correlation between income inequality and inflation and then present a theory of the determination of inflation outcomes in democratic societies that illustrates how greater inequality leads to greater inflation, owing to a desire by voters for wealth redistribution. We conclude by showing that democracies with more independent central banks tend to have better inflation outcomes for a given degree of inequality. JEL Classification E5, H0Inégalité, inflation et l'indépendance de la banque centrale. Quels sont les facteurs qui pourraient expliquer les expériences inflationnistes tellement différentes des divers pays dans le passé récent, et l'expérience tellement différente d'un pays donné dans le temps? Les auteurs analysent ce problème de la détermination du taux d'inflation dans une perspective d'économie politique. Ils déterminent qu'il y a une corrélation positive entre l'inégalité et l'inflation, et présentent une théorie de la détermination de l'inflation dans les sociétés démocratiques qui montre comment une inégalité plus grande entraîne une inflation plus grande à cause du désir des électeurs de demander une redistribution de la richesse. Le mémoire montre en terminant que les démocraties equipées de banques centrales plus indépendantes tendent à avoir de meilleurs résultats en terme d'inflation pour un degré d'inégalité donné.
Tax rates on labor income, capital income and consumption-and the redistributive transfers those taxes …nance-di¤er widely across developed countries. Can majority-voting methods, applied to a calibrated growth model, explain that variation? The answer I …nd is yes, and then some. In this paper, I examine a simple growth model, calibrated roughly to US data, in which the political decision is over constant paths of taxes on factor income and consumption, used to …nance a lump-sum transfer. I …rst look at outcomes under probabilistic voting, and …nd that equilibria are extremely sensitive to the speci…cation of uncertainty.I then consider other ways to restrict the range of majority-rule outcomes, looking at the model's implications for the shape of the Pareto set and the uncovered set, and the existence or non-existence of a Condorcet winner. Solving the model on discrete grid of policy choices, I …nd that no Condorcet winner exists and that the Pareto and uncovered sets, while small relative to the entire issue space, are large relative to the range of tax policies we see in data for a collection of 20 OECD countries. Taking that data as the issue space, I …nd that none of the 20 can be ruled out on e¢ ciency grounds, and that 10 of the 20 are in the uncovered set. Those 10 encompass policies as diverse as those of the US, Norway and Austria. One can construct a Condorcet cycle including all 10 countries'tax vectors.The key features of the model here, as compared to other models on the endogenous determination of taxes and redistribution, is that the issue space is multidimensional and, at the same time, no one voter type is su¢ ciently numerous to be decisive. I conclude that the sharp predictions of papers in this literature may not survive an expansion of their issue spaces or the allowance for a slightly less homogeneous electorate.
We develop a Mobility and Engagement Index (MEI) based on a range of mobility metrics from Safegraph geolocation data, and validate the index with mobility data from Google and Unacast. 1 We construct MEIs at the county, MSA, state and nationwide level, and link these measures to indicators of economic activity. According to our measures, the bulk of sheltering-in-place and social disengagement occurred during the week of March 15 and simultaneously across the U.S. At the national peak of the decline in mobility in early April, localities that engaged in a 10% larger decrease in mobility than average saw an additional 0.6% of their populations claiming unemployment insurance, an additional 2.8 percentage point reduction in small businesses employment, an additional 2.6 percentage point increase in small business closures, and an additional 3.2 percentage point reduction in new-business applications. A gradual and broad-based resumption of mobility and engagement started in the third week of April.
In this paper, I give sufficient conditions for the existence of endogenously growing optimal paths in a general multisector Ramsey model of optimal capital accumulation. The key assumption involves the existence of a positive vector of capital stocks which admits strictly positive consumption and expansibility in inverse proportion to the utility discount factor. If the technology set contains the ray through such a point, in addition to standard convexity and interiority assumptions, then optimal paths grow without bound from any strictly positive initial stocks. The result unifies a number of existing models in the growth theory literature. * Manuscript received December 1993. l This paper is based on the second chapter of my Ph.D. thesis at the University of Rochester. The comments of John H. Boyd III, Lionel McKenzie, audiences at Rochester, Toronto and the 1991 Midwest Mathematical Economics meetings, and anonymous referees are gratefully acknowledged. Any remaining errors are my own. 2 See, for example, Barro and Sala-i-Martin (1992), Bond, Wang and Yip (1993), King and Rebelo (1991) for models of this sort. 403 404 JIM DOLMAS sumer chooses paths of consumption and capital so as to maximize lifetime utility 00 E Vt-u(c,) t=1 subject to the technological constraints ct + kt
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