Confidence intervals based on cluster-robust covariance matrices can be constructed in many ways. In addition to conventional intervals obtained by inverting Wald (t) tests, the paper studies intervals obtained by inverting LM tests, studentized bootstrap intervals based on the wild cluster bootstrap, and restricted bootstrap intervals obtained by inverting bootstrap Wald and LM tests. It also studies the choice of an auxiliary distribution for the wild bootstrap, a modified covariance matrix based on transforming the residuals that was proposed some years ago, and new wild bootstrap procedures based on the same idea. Some procedures perform extraordinarily well even with the number of clusters is small.

In this paper, we have investigated the extent and the speed of adjustment of six domestic markets of imported rice and the local market of processed rice in Togo to rice prices change on the global market and how the local market of paddy and the imported rice markets respond respectively to prices change in the processed rice and on the central market of imported rice Lomé and test for asymmetry in the adjustment process using both standard and threshold cointegration tests. Symmetric and asymmetric error correction models with respect to the linear and threshold cointegration relationships between markets pairings are estimated to investigate short-run prices dynamics. Results indicate that prices for the global to local markets pairings are cointegrated with relatively low price transmission elasticities. Prices on the imported rice markets in Togo are also cointegrated (when Lomé is considered as the central market). Threshold cointegration tests reveal that in the long-run, the local market of paddy adjusts asymmetrically to prices change in the processed rice and there is asymmetric adjustment of domestic markets of Cinkassé and Lomé to prices change on the global market. Except for Amégnran market, the four other domestic markets of imported rice adjust also asymmetrically to rice prices change on the central market of Lomé. In the short-run, there is asymmetric adjustment only between the global market and the imported rice markets of Lomé and Cinkassé. Among imported rice prices dynamics in Togo, only Cinkassé market adjust asymmetrically to prices change on the central market of Lomé. The results imply that oligopolistic middlemen in rice marketing in Togo are more sensitive and react quickly when rice prices change on the global market tends to squeeze their margins than changes that stretch them.

The aim of this article is to highlight important factors neglected in modelling the effects of deterrent policies on thieves' activities in the real world. The methodology adopted consists of defining a world with three continuous spaces. Space in the centre has no institutions and no production. Only the other two spaces have institutions and are places for production. The study uses the Tullock contest fonction for n-players developed by Jia (2012) to identify thieves' efforts and the institutions' endowments at equilibrium. In contrast to the existing literature, our results indicate a perverse, indirect effect of institutions' deterrence strategies on thieves' activities and a negative effect of an increase in institutional deterrence on the total proportion of production stolen. This outcome therefore supports deterrence policies. Symmetric equilibrium becomes unstable when institutions have different production levels. However, we note that asymmetric equilibrium remains optimal, even in situations of differences in production across institutions. A confrontation between thieves from different areas can be a way for an institution to provide less deterrence in an asymmetric balance while guaranteeing a higher level of consumption than that under the opposing institution.

This research uses the Youth in Transition Survey, Reading Cohort (“YITS-A”) to analyse access to post-secondary education (PSE) in Québec in comparison to other Canadian provinces and regions. We begin by presenting access rates by region and show that university participation rates in Québec are relatively low, while college rates are high in comparison to other provinces, although these differences are presumably due in part to the cégep system in Québec. We then undertake an econometric analysis which reveals that the effects of parental education on access to PSE are much stronger than the effects of family income, and are relatively uniform across the country. The substantially weaker family income effects (stronger for females than males) figure most importantly for the Atlantic Provinces, but much less elsewhere, including in Québec. We also find that the relationships between test scores from the Programme for International Student Assessment (PISA), which measures academic ‘‘performance’’ and ‘‘ability’’ and even more so high school grades, differ by province, and are generally strongest in Ontario and weakest in Québec, again perhaps in part due to the cégep system which represents a mediating influence between high school performance and university attendance, in particular. Males are much less likely to attend university across the country, but this gap is widest in Quebec. Our analysis of traditionally under-represented and minority groups points to students from rural Québec actually being at no disadvantage in terms of PSE participation, second-generation immigrants doing especially well in comparison to other provinces, but more recent first-generation immigrants not faring nearly so well in Québec. Finally, young Québecers who do not go on to PSE (especially the Francophone majority) are much more likely than other Canadian youths to say that they simply have no aspirations to attend PSE, and to otherwise say they face no barriers to attending PSE. Policy implications are discussed using a fiscal lens.

Recent evidence indicates that income and wealth inequality have been increasing, while the tax-transfer system has not responded. If anything, progressivity has decreased and capital income has become increasingly sheltered. Arguably, a significant amount of the increase in inequality reflects windfall gains or rents to various taxpayers, both individuals and firms. Recent proposals by the Mirrlees Review, drawing on lessons from optimal tax analysis, include some ways that the tax system can be reformed to tax windfall gains, albeit in a context limited by distribution-neutrality. We propose a tax reform agenda for Québec and Canada that can both improve efficiency and fairness. Our proposals contrast with those of the Québec Taxation Review Committee.In our view, there is a strong case for taxing capital income as part of redistribution policy, in part because capital income includes unexpected gains, or rents, that accrue disproportionately to high-income persons. Our preferred treatment of capital income at the personal level would include the following. First, strict limits on tax sheltering should be maintained to ensure that some capital income is taxable for high-income persons. Contribution limits should be more generous for RRSPs than for TFSAs given that unexpected returns are taxed under the former but exempted under the latter. Second, capital gains on housing, above some lifetime exemption level, should be taxed. Third, a tax on large inheritances should be introduced to reduce the intergenerational transmission of wealth inequality and promote equality of opportunity.At the corporate level, we recommend a fundamental change in the role that the system is meant to play. The current system, which is designed to serve as a withholding device for the personal tax by taxing shareholder income at source, should be replaced by a cash-flow tax system, or equivalently a rent-based corporate tax. This recommendation is motivated by the fact that the corporate tax on normal risk-adjusted return is largely shifted to labour given the high degree of international capital mobility. Moreover, the withholding role of the corporate tax has become unnecessary given that most capital income is now sheltered from the personal tax. Among the different cash-flow equivalent taxes available, the allowance for corporate equity tax would be the easiest to implement. It would simply involve adding a deduction for the cost of equity finance at the risk-free interest rate in addition to the deductions for interest and depreciation that currently exist. The adoption of a cash-flow equivalent tax would mitigate the disincentives for investment, innovation and growth that the current system imposes. As well, it would eliminate the incentive to finance investment by debt.In addition, we argue that the integration of the personal and corporate income taxes has become largely unnecessary. Therefore, we recommend eliminating the dividend tax credit and the preferential treatment of capital gains. Doing so would also offset the revenue cost of adopting a rent-based corporate tax.The same tax base should apply to incorporated and unincorporated businesses. The small business deduction should be maintained, given that it compensates for the imperfect refundability of tax losses for bankrupt firms. However, cumulative lifetime limits should be adopted so firms are not rewarded for staying small.Increased income inequality calls for more progressivity of the tax system both at the top and bottom of the income distribution. This could be achieved by adding a new tax bracket for the top decile of taxpayers and making all tax credits refundable.To maintain some harmonization, these reforms should ideally be adopted by both orders of government. However, several proposals could be adopted unilaterally by the Québec government with relatively little difficulty.

We study four different climate change games and compare with the outcome of choices by a Social Planner. In a dynamic setting, two players choose levels of carbon emissions. Rising atmospheric carbon stocks increase average global temperature which damages player utilities. Temperature is modelled as a stochastic differential equation. We contrast the results of a Stackelberg game with a game in which both players act as leaders (a Leader-Leader, or Trumpian game). We also examine an Interleaved game where there is a significant time interval between player decisions. Finally we examine a game where a Nash equilibrium is chosen if it exists, and otherwise a Stackelberg game is played. One or both players may be better off in these alternative games compared to the Stackelberg game, depending on state variables. We conclude that it is important to consider alternate game structures in examining strategic interactions in pollution games. We also demonstrate that the Stackelberg game is the limit of the Interleaved game as the time between decisions goes to zero.

In 1989, Salah El Serafy proposed a method of accounting for a nonrenewable resource based on net present value. A reinterpretation and extension of his analysis permit what he calls a proper representation of net income for use in an accurate aggregation, “bottom-up”, from project or enterprise data to the sectorial and national accounts. An earlier paper by Lasserre provides intellectual support for the method. What may be called El Serafy’s template can be interpreted and applied for many purposes, including the proper calculation of income and depletion of an exhaustible resource.

The purpose of this paper is to evaluate the impact of African regional blocs on African trade flows while allowing for spatial interdependence between trade flows. To this end, we derive a spatial gravity equation by removing the implicit assumption that trade flows between two trading partners are independent of what happens in the rest of the trading world. We estimate the border effects for five Sub-Saharan regional blocs (cemac, comesa, ecowas, sadc and waemu). We decompose the border effect into two components: a trade-boosting intra-bloc effect and a trade-reducing inter-bloc effect. Our findings show that trade agreements produce positive effects on intra-bloc trade flows and these effects are particularly prominent when the blocs are advanced in their integration process. In addition, the spatial interdependence between trade flows is reflected in a negative relationship as implied by the theoretical model, suggesting a natural measure of spatial competition.

This paper evaluates the effect of increased trade on the mortality of workers in the manufacturing sector. We exploit the large increase of Chinese exports in the last two decades to assess its effect in two different countries, Italy and the US. Exploiting individual longitudinal data, we find that trade leads to an increased mortality rate among these populations, the effect being higher in Italy than in the US. A one billion dollar increase in imports leads to a 4 percent mortality increase in the US and up to 7 percent in Italy. We show that mortality patterns are different across occupational groups, with a more pronounced effect on blue-collar workers in the US and in Italy, a marked effect on managers of small firms. We show that there are important spatial inequalities in the mortality burden of trade.

This study revisits the question of whether risk management has real implications on firm value, risk, and accounting performance using a new dataset on the hedging activities of U.S. oil producers. In light of the controversial results in the literature, this paper estimates the hedging premium question for firms by using a more robust econometric methodology, namely essential heterogeneity models, that controls for bias related to selection on unobservables and self-selection in the estimation of marginal treatment effects (MTE). We find that oil producers with higher propensity scores for the use of more extensive hedging activities tend to have higher marginal firm value and higher marginal risk reduction and realize stronger marginal accounting performance. These oil producers with higher propensity scores also have significant average treatment effects (ATE) for firm financial value, idiosyncratic risk and systematic risk.