Intertemporal Issues Research Articles

Agreements concluded in the 1920s with Czechoslovakia, Austria and Hungary and the multilateral Miskolc Agreement of 1977 as the basic treaties binding upon Poland to prevent double taxation of immovable and movable deceased’s estate

Agreements eliminating double taxation of immovable and movable property included in the deceased’s estate are rare in terms of practical application of treaties in the Republic of Poland. These are agreements dating back to the interwar period, and the scope of their influence on the domestic practice seemed modest so far. Moreover, Poland is theoretically bound by one multilateral agreement regulating, amongst others, this issue. Due to the passage of time and developments in the international environment, serious concerns have arisen as to their validity and mutual relations. The purpose of this text is to determine the scope of subjective application of these agreements. Attention is also given to the material scope of application of the treaties and intertemporal issues. It is not excluded that due to the increasing influence of EU law on succession, these agreements will be gaining a greater application in the coming years.

Decision over Time as a By-Product of a Measure of Utility: A Reappraisal of Paul Samuelson’s “A Note on Measurement of Utility” (1937)

This contribution aims to highlight a neglected aspect of Samuelson’s famous 1937 paper “A Note on Measurement of Utility”. Although the 1937 paper is usually regarded as the foundation of discounted utility theory, and rightly so, it is primarily concerned with utility measurement and deals only indirectly with decision over time – intertemporal issues appearing as a by-product of the realisation of a unique utility measure. But the treatment of discounted utility in turn influenced Samuelson’s understanding of cardinality. Cardinality appears here as the result of a cognitive ability that manifests when agents face a decision experiment over time in which they are compelled to cardinalize their utility functions. The result is the weak plausibility of cardinality in a more general context, such that, contrary to the usual views, we may say that Samuelson’s ordinalist approach was already in the making in 1937.

Intertemporal issues related to anti-tax avoidance clause on the example of the resolutions of the Council for Anti-Tax Avoidance of 18 December 2019

The article discusses the line of the Council for the Prevention of Tax Avoidance in terms of intertemporal issues of the anti-tax avoidance clause and decisions of the creation moment of the tax benefit. The considerations refer to the Council resolutions No. 3/2019-5/2019 of 18 December 2019 and constitute the part of the first opinions of this institution regarding the application of the art. 119a of the Tax Ordinance Act.

The New Regulation of the Employment Relationship of Academic Teachers – Contentious Issues

Abstract The Law on Higher Education and Science of 2018 is the ninth act regulating the employment of academic teachers in Poland. This Act does not introduce a breakthrough in the model of employing academic teachers although it introduces significant changes. They concern the employment contract as the basis of the employment relationship or a new catalogue of academic teacher positions. The new regulations raise a number of doubts regarding e.g. the duties of academic teachers, the impact of public or private status of the university on the situation of employees and intertemporal issues. These issues were analysed in the article.

Understanding Rationality in Sustainable Development Decision-Making: Unfolding the Motivations for Action

In sustainable development (SD), the rationality behind decision-making is non-trivial because it deals with, among others, inter-temporal issues in complex systems. Choosing the rational thing to do and coping with the tradeoffs of short and long-term outcomes are demanding because of the uncertainty regarding future preferences and the consequences of today’s actions. If decisions are poorly made, there could be terrible consequences for humanity. One way to understand the rationality behind the SD decision-making process is to study the motivations to act. However, the motivations to engage in SD are insufficiently discussed in the literature. This paper aims to analyze those motivations in the context of rational decision-making with different time frames by making them explicit. A framework is proposed to identify motivations by systematizing the sample literature on why SD is important, what SD is, and how SD is practiced. The fear of harm from possible overshoot and collapse is proposed as the main driver for the motivations to act. Such fear shapes understandings of the inter-temporal effects of today’s decisions, suggesting the use of different types of rationalities according to the time frame considered.

Public economics as if time matters: Climate change and the dynamics of policy

Tony Atkinson played a crucial role in shaping modern public economics, but throughout his life challenged whether we were making the right assumptions and were building models which captured the essence of the issues under examination. This paper examines questions discussed with Tony concerning public policy to foster change where the pace and nature of change are critical to any serious policy assessment. The primary example is climate change.The paper argues that subjects such as the dynamics of innovation, of potentially immense and destabilising risks, and of political economy, together with technicalities around non-linearities and dynamic increasing returns, all of which are at the heart of the challenge of climate change, will require a series of focused models for their investigation. Attempts to build integrated assessment models (IAMs) for the analysis of climate change have been largely misplaced and omit key effects and questions of the above kind. Intertemporal issues and values are at the core of policy towards climate change and the paper shows that much of the intertemporal economic analysis of the issues around climate change has been misguided and has ridden roughshod over the analytical underpinnings and the underlying ethics of discounting. Where major decline is possible, discounting is fiercely endogenous; and where capital markets are imperfect and risk intense, discount rates cannot be read off from markets.Notwithstanding the modelling difficulties and the challenging research agenda, the paper argues that the urgency of the problem (for example, world infrastructure will double in the next 15–20 years and there are major dangers of lock-in of dirty and damaging capital) require strong action and we know enough about policy to begin travelling down the path of an attractive low-carbon transition.

A Model of the Confidence Channel of Fiscal Policy

This article presents a simple macroeconomic model where government spending affects aggregate demand directly and indirectly, through an expectational channel. Prices are fully flexible and the model is static, so intertemporal issues play no role. There are three important elements in the model: (i) fixed adjustment costs for investment, which create an inaction zone; (ii) noisy idiosyncratic information about the aggregate economy; and (iii) imperfect substitution among private goods and goods provided by the government. An increase in government spending raises demand for private goods and may prevent a coordination failure. The optimal level of government expenditure is high when the desired level of investment is low, which we interpret as a time of low economic activity.

Prawo intertemporalne w państwie prawnym

W niniejszym opracowaniu przedstawiono podstawowe związki między tzw. prawem intertemporalnym a zasadą państwa prawnego. Zasadę tę osadzono w strukturze ontycznej prawa wyznaczanej deklarowanym konstytucyjnie uznaniem godności ludzkiej za źródło praw i wolności jednostki. Praw zatem niedysponowanych, albowiem jednym z aspektów prawa fundowanego na związkach z godnością ludzką jest jego niearbitralność (w sensie, że człowiek nie może być środkiem prawa, zawsze jest jego celem). Po rozpoznaniu kontekstu filozoficznego, normatywnego, kognitywnego i historycznego problematyki intertemporalnej skrótowo została przedstawiona ona sama. Problematyka prawa intertemporalnego pozostaje w ścisłych związkach z zasadą państwa prawnego, traktowaną jako koniunktywnie pojęta zasada zasad służących realizacji przyjętej koncepcji państwa prawnego. Zasada państwa prawnego chroni trzy podstawowe wartości łączące się z zagadnieniami intertemporalnymi. Pierwszą jest wolność ludzka; drugą ‒ pewność prawa, trzecią ‒ jasność i przejrzystość prawa (co skądinąd można traktować jako przejaw pewności prawa), której ochronie służą m.in. zasady poprawności legislacyjnej. To właśnie zasada państwa prawnego jest podstawowym wyznacznikiem prawnej poprawności decyzji prawodawczej co do stanowienia regulacji intertemporalnych, podstawową jej funkcją jest zaś ochrona jednostki przed nielegitymowanymi działaniami organów władzy publicznej.

ETHICS, EQUITY AND THE ECONOMICS OF CLIMATE CHANGE PAPER 2: ECONOMICS AND POLITICS

Both intertemporal and intratemporal equity are central to the examination of policy towards climate change. However, many discussions of intertemporal issues have been marred by serious analytical errors, particularly in applying standard approaches to discounting; the errors arise, in part, from paying insufficient attention to the magnitude of potential damages, and in part from overlooking problems with market information. Some of the philosophical concepts and principles of Paper 1 are applied to the analytics and ethics of pure-time discounting and infinite-horizon models, providing helpful insights into orderings of welfare streams and obligations towards future generations. Such principles give little support for the idea of discrimination by date of birth. Intratemporal issues are central to problematic and slow-moving international discussions and are the second focus of this paper. A way forward is to cast the policy issues and analyses in a way that keeps equity issues central and embeds them in the challenge of fostering the dynamic transition to the low-carbon economy in both developed and developing countries. This avoids the trap of seeing issues primarily in terms of burden-sharing and zero-sum games – that leads to inaction and the most inequitable outcome of all.

Intertemporal issues and marginal abatement costs in the UK transport sector

An energy system model, UK MARKAL, is combined with decomposition analysis and sensitivity analysis to derive mitigation costs and emissions reduction potentials in the UK transport sector. The paper tests the robustness of a marginal abatement cost curve for the year 2030 for two parameters: path dependency and discount rate. Path dependency is found to be a significant, yet not substantial, influencing factor on the shape and the structure of the marginal abatement cost curve. Doubling the technology-specific hurdle rates shows that abatement costs increase significantly. The results suggest that policy makers should be aware of the underlying carbon tax pathway and whether results are based on society’s view or a private perspective.

Intertemporal Issues in Administrative Law and Concept of Retroactivity in Law

In essence, this study aims at presenting basic intertemporal problems of administrative law. These problems are extremely complex and, despite a commonly held view on the alleged poorer theoretical issues in the field of administrative law, intertemporal issues in administrative law demonstrate an even greater level of complexity compared with such a well-developed discipline as civil law. This state of affairs stems from the very nature of this branch of law. Presumably, this is why within the field of administrative law we may encounter application of not only all basic descriptive principles of administrative law, but also of those principles that are particular in a certain aspect (e.g. the principle of validity, the principle of lex mitior retro agit). It is equally important to mention that intertemporal decisions are made also in the field of administrative law; the content of these decisions is only partially (if at all) determined by positive law.

Inefficiency of Bilateral Bargaining in Inter-Bank Markets

Many countries have inter-bank markets that are Over The Counter (OTC) instead of exchange mediated. In OTC systems, bilateral bargaining takes place over the rate of interest on the (inter-bank) loan. This paper characterizes such bilateral bargaining for loans between banks under asymmetric information and shows that bargaining outcomes maybe inefficient. The paper suggests two sources of inefficiency. In a one period model, bargaining between two banks may fail due to incomplete information even if gains to trade exist. Inter-temporal issues examined in this paper reveals that repeated interaction could create distorting effects through reciprocal contracts. Both cases are shown to require active liquidity management by the regulatory authority in order to restore the first best allocation.

Evaluating flood risk management options in Scotland: A participant-led multi-criteria approach

The characteristics of flood risk management include complexity, large spatial scales, inter-temporal issues, plural values and conflicts of interests. It is argued that issues with such characteristics require public participation in the decision making process. This study builds on existing deliberative processes to develop a new participant-led multi-criteria method to evaluate flood risk management options in Scotland. The results show that participants preferred regeneration or planting of native woodland to other flood management options, and least preferred building flood walls and embankments. The design of the workshops allowed a rich dataset to reveal the thinking behind such results and provided a deeper understanding of why participants came to these conclusions.

Regulating Infrastructure: The Impact on Risk and Investment

The last thirty years have witnessed a fundamental change in the regulation of infrastructure industries. Whereas firms were subject to rate of return regulation and protected from entry in the past, they now face various forms of incentive regulation, competition is actively promoted by many regulators, and both regulators and the firms they regulate must often confront rapid technological progress. This paper surveys the literature on the investment implications of different regulatory schemes, highlighting the relevance of modern investment theory, which puts risk and intertemporal issues, such as the irreversibility of much infrastructure investment, center stage. It discusses the impact on regulated monopolists' investment behavior of key regulatory characteristics, namely the price flexibility allowed by the regulator, the length of the regulatory cycle, and the costs the regulator will allow the firm to recover at future regulatory hearings. It also considers the impact of competition, especially the situation where a vertically integrated firm has its operation of a bottleneck asset regulated, on investment by regulated firms and their competitors.

Regulating Infrastructure: The Impact on Risk and Investment

The last thirty years have witnessed a fundamental change in the regulation of infrastructure industries. Whereas firms were subject to rate of return regulation and protected from entry in the past, now they face various forms of incentive regulation, competition is actively promoted by many regulators, and both regulators and the firms they regulate must often confront rapid technological progress. This paper surveys the literature on the investment implications of different regulatory schemes, highlighting the relevance of modern investment theory, which puts risk and intertemporal issues, such as the irreversibility of much infrastructure investment, center stage. It discusses the impact on regulated monopolists' investment behavior of key regulatory characteristics, namely the price flexibility allowed by the regulator, the length of the regulatory cycle, and the costs the regulator will allow the firm to recover at future regulatory hearings. It also considers the impact of competition, especially the situation where a vertically integrated firm has its operation of a bottleneck asset regulated, on investment by regulated firms and their competitors.

Inefficiency of bilateral bargaining in interbank markets

Many countries have interbank markets that are over the counter (OTC) instead of exchange mediated. In OTC systems, bilateral bargaining takes place over the rate of interest on the (interbank) loan. This article characterizes such bilateral bargaining for loans between banks under asymmetric information and shows that bargaining outcomes maybe inefficient. The article suggests two sources of inefficiency. In a one-period model, bargaining between two banks may fail due to incomplete information even if gains to trade exist. Intertemporal issues examined in this article reveal that repeated interaction could create distorting effects through reciprocal contracts. Both cases are shown to require active liquidity management by the regulatory authority to restore the first best allocation.

Economic analysis of environmental policy: concerns regarding the use and role of the social discount rate

The analysis of environmental policy and/or regulation involves determining and assessing the impact of costs and benefits which may accrue over many years. There are a number of intertemporal issues related to such decisions including whether and how to state future costs and benefits in today's terms through a technique known as discounting. In practice, economic analysis of environmental issues generally involves discounting future costs and benefits at a rate known as the social discount rate. This paper examines the decision to discount future benefits and/or costs and highlights the rationale for the technique. The more controversial and problematic aspects of this procedure are analyzed so that those assessing environmental investments may make more informed decisions.

Incentive Indexes for Regulated Industries

A range of performance measures are suggested and evaluated in the context of regulated industries with multiple inputs and/or multiple outputs. These measures are intended to induce optimizing behavior, i.e., to induce unit cost minimization or productivity growth maximization. Intertemporal and practical implementation issues are also considered.

The Simplest Dynamic General-Equilibrium Model of an Open Economy

This paper presents the simplest possible general-equilibrium model of an open economy in which producer and consumer decisions are both intra- and intertemporally consistent. Consumers maximize the present value of the utility of consumption; producers maximize the present value of profits. The model solves for the set of intertemporally consistent prices. The parsimonious structure of the model is achieved by dividing the economy into two producing sectors—exports and domestic goods—and two consumed goods—imports and domestic goods. As a result, there is only one endogenous price per period to be solved for (the price of the domestic good), although “structural” questions, such as the evolution of the real exchange rate, can be posed with the model. Furthermore, with this structural breakdown, the model can be calibrated with national accounts data only. In the paper, we show how to calibrate such a model (including specification of an adjustment-cost function, to avoid “bang-bang” behavior) and use the model to examine various questions where intertemporal issues are important, including terms-of-trade shocks and tariff reform.

Intertemporal issues associated with the control of macro-economic systems

The study of intertemporal economic phenomena increasingly requires the application of system theoretical methods in order to capture some complexities of the socio-economic reality as well as to enhance the efficient use of available information. Hereupon, one tries by dint of stochastic techniques to take into account either measurement errors, partial and indirect observability of relevant system properties and different sorts of uncertainty. Further, one stresses general behavioural patterns characterizing the evolution of certain systems, which leads to a deeper and systematic understanding of them. Here, we are interested in matters related to the construction of models, derivation of their associate dynamics, introduction of control variables and performance criteria aimed at steering a system from a given to a desired state, and this in an optimal fashion. The purpose of the present paper is twofold. First, to give a short and intuitive account of some aspects of systems theory and model building, and to indicate how these notions work in connection with socioeconomic systems. Secondly, to show how we can use these system and control techniques studying some problems of economic development planning and labour allocation. However, we shall limit ourselves to present a few results and describe some applications in which we have participated.