Temporary Cut Research Articles

Fiscal consolidation plans with underground economy

AbstractFiscal consolidation literature often neglects that there are economies characterized by sizable underground sectors, with their mechanisms of response to fiscal policy shocks. Therefore, reliable analyses of fiscal consolidation plans call for the decomposition of Gross Domestic Product in its regular and hidden components. We investigate fiscal consolidation effects in the context of tax evasion for the Italian economy. Results show that a temporary cut in public spending associated with a permanent drop in tax rate yet entails tax evasion reduction. The main underlying mechanism is the strong responsiveness of the underground sector, implying a reallocation of resources toward the regular sector.

Impact of higher capital buffers on banks’ lending and risk-taking in the short- and medium-term: Evidence from the euro area experiments

We study the impact of higher capital buffers on bank lending and risk-taking behaviour, at different time horizons following the initial policy decision. Employing a regression discontinuity design and confidential centralised supervisory data for euro area banks from 2014 to 2017, our research uniquely explores the effects of the EU policy on other systemically important institutions (O-SIIs) through a quasi-randomised experiment, exploiting the induced policy change and discontinuity of the O-SII identification process. Our findings show that the introduction of the O-SII buffers resulted in a short-term reduction in credit supply to households and financial sector, followed by a medium-term shift towards less risky borrowers, particularly in the household sector. We find a temporary cut in loan growth post-capital hikes, succeeded by a rebound in the medium-term. Our results substantiate the hypothesis that higher capital buffers can positively discipline banks by reducing risk-taking in the medium-term. At the same time, evidence suggests a limited adverse impact on the real economy, characterised by a temporary reduction in credit supply restricted to instances of macroprudential policy tightening.

Labour Taxes, Market Size and Productivity Growth

Abstract How do changes in labour taxes affect innovation and aggregate productivity growth? To answer this question, we propose a quantitative, general equilibrium growth model featuring product and quality innovation with endogenous market structure, estimate its parameters and provide empirical validation for the propagation mechanism of labour tax changes. We find that a temporary cut in flat-rate labour taxes produces a growth acceleration in aggregate productivity, permanently increasing the path of real GDP per capita. Moreover, such permanent gains are sizeable even without long-run growth effects.

Análisis de egresos de posgrado en una universidad argentina

The expansion of postgraduate careers in our country has had a sustained development in the last decades, however, the growth process falls into disharmony when we notice the few graduates that occur in the same period referred to, which does not reach 10 %. At the Faculty of Philosophy, Humanities and Arts of the National University of San Juan, Argentina, the picture is no different. This work presents a descriptive analysis of the FFHA-UNSJ master's degree discharges, considering the period 2000-2019. The temporary cut is arbitrary and the selection of careers is due to having the thesis preparation as an academic requirement to obtain the corresponding degree. In the first instance, a brief characterization of the degrees is presented, then the expenditures for the period considered and the actual duration used by the students of the degrees considered to be received are presented quantitatively (by degrees), and finally, some perceptions and meanings that graduates have about the careers mentioned.

Atividade antibiótica de extratos e óleos essenciais frente à cepa Propionibacterium acnes

O uso de produtos naturais tem agregado incremento tecnológico na área de dermocosméticos. Em especial, no tratamento de processos e afecções cutâneas, como a acne vulgar – manifestada pela presença do agente infeccioso Propionibacterium acnes, cepa com crescente mecanismos de resistência à antibióticos. Tem-se como objetivo analisar, por meio de uma revisão de literatura sistemática, o efeito antibiótico exercido por óleos essenciais e extratos vegetais frente a P.acnes. Para a coleta de dados, utilizou-se as bases Science Direct, Biblioteca Virtual em Saúde (BVS) e Scientific Electronic Library Online (SciELO) junto aos descritores “plantas medicinais” “extratos vegetais” “óleos essenciais” “Propionibacterium acnes”, em português e inglês. Adotou-se como critério de inclusão publicações dos últimos 5 anos (2015-2020) e estudos experimentais. E como de exclusão artigos que não apresentassem alguma ação contra a cepa, réplicas entre as plataformas. Após a aplicação dos descritores, recorte temporal e critérios adotados, 13 artigos responderam aos aspectos mais significativos da abordagem. Dos estudos incluídos, além do potencial antibacteriano foram explorados também o sinérgico e anti-inflamatório. Em grande parte dos estudos, é sugerido que alguns metabólitos interagem com a membrana celular microbiana causando deformações e também a inibindo a síntese de ácidos nucleicos relacionados ao material genético e atividade enzimática. Nota-se, que o uso de óleos essenciais e extratos vegetais surge, como alternativa capaz de exercer atividade antimicrobiana, sinérgica ou anti-inflamatória, podendo originar o desenvolvimento de novas abordagens terapêuticas.

Autumn Budget 2017: An IEA Briefing

The Chancellor should resist calls to ramp up spending and focus instead on reducing the burden of tax and regulation. The economy has weathered the initial shock of Brexit much better than most had expected. Unemployment has continued to fall and inflation should peak soon, easing the pressure on real incomes. There is no need for a fiscal boost. What’s more, the public finances remain in poor shape. There is room for some small increases in spending on priority areas, partly funded by savings on contributions to the EU. Even on current plans, it will be at least a quarter of a century since the government last balanced the books. This Budget will have to consider more pessimistic assumptions about future productivity, made by the Office for Budget Responsibility. As it happens, the OBR may be chucking in the towel just as productivity is about to recover. But if the OBR is right, an extended period of lower growth will reduce the fiscal wiggle room. The Chancellor should ignore the temptation to address intergenerational inequality with tax breaks for younger people or a temporary cut in stamp duty for first-time buyers. Instead, the playing field should be levelled by tackling underlying problems that mainly affect the young, including the lack of housing supply, and by withdrawing subsidies which mainly benefit the elderly regardless of need. The Chancellor should resist calls to boost productivity with a splurge of public investment. Rather, he should focus on measures that free up the economy without spending enormous amounts of other people’s money, such as liberalising planning laws to facilitate housebuilding and devolving more fiscal powers to the regions. While there may be little margin for additional tax cuts, he should announce a fundamental review of taxes on property – including stamp duty – with the aim of dramatically simplifying the system. On Brexit, the Chancellor should emphasise the opportunities rather than just dwell on the risks. These opportunities include the scope to reduce trade barriers with the rest of the world and review regulations at home.

End of double taxation: Is the policy better when announced?

This paper examines the effectiveness of the “end of double taxation” (on dividends) policy in stabilizing an economy. Both announced and unannounced policies are considered. A reduction in double taxation stimulates investment and improves welfare, but its impact on output is moderate and it has a negative effect on work hours. A temporary cut creates an investment boom but also generates an investment slump when the tax cut expires. Announcements of future tax cuts are found to have important effect on output dynamics. Agents respond to the tax policy even before it is implemented. If the tax cut is announced to be temporary, its impact on output is greatly reduced. Our study suggests that a temporary dividend tax cut is most effective in stabilizing a recession stricken economy when the policy change comes as “news” to the economy.

The Economics of a Temporary VAT Cut*

AbstractThis paper analyses the likely implications of the temporary cut in VAT in the UK to 15 per cent, with a return to 17.5 per cent in place for the end of 2009. We distinguish between the income effect of the cut and the (intertemporal) substitution effect. The former is likely to be small because the change in lifetime income is minimal. The second effect is likely to be much more important because the reduction in the price of goods bought in 2009 compared with 2010 gives an incentive to increase consumer spending this year. With an elasticity of intertemporal substitution of about 1, we would expect the cut in VAT to boost consumer spending by about 1.2 per cent over what it would otherwise be. The distributional consequences of the VAT cut are regressive because goods subject to VAT tend to be luxuries. Unlike a cut in interest rates, there is no difference in the distributional consequences for borrowers compared with savers.

The Economics of a Reduction in VAT*

AbstractWe explore the effects of a temporary cut in VAT, identifying three possible effects: an income effect as people benefit from a lower cost of living during the period of the reduction, a substitution effect as people bring their consumption forward and an arbitrage effect as people buy non‐perishable goods before the end of the period of low VAT for consumption after the VAT rate has been raised. International evidence suggests a clear overall impact on consumption, although the nature of the pattern depends on the way in which the data are analysed. However, the key policy issue is the impact of the VAT change on output and, to examine that, a simulation model of the whole economy is needed. Evidence from the National Institute's Global Economic Model suggests that the impact of the recent VAT reduction is likely to build up during the course of 2009. The reduction in VAT from 17½ per cent to 15 per cent is likely to result in consumption being augmented by less than 1 per cent by the fourth quarter of 2009. However, GDP is likely to be raised by less than half a per cent relative to what would have happened without the VAT increase. After the temporary reduction is over, both consumption and GDP are depressed as a result of the policy.

Dividends and Tax Policy in the Long Run

There is a long-standing debate as to whether changes in shareholder-level taxes have an effect on firm dividend policy. The traditional view is that tax changes influence dividends, while the new view is that there generally is no such effect. In support of the traditional view, recent observers point to the rise in dividends following the reduction in the tax rate on dividends in 2003. In fact, the resurgence in dividends has been so strong that President Bush has made it one of his top legislative priorities to permanently extend the tax cut, which is currently set to expire at the end of 2010. The popular assumption is that the rise in dividends - and any associated economic and corporate governance benefits - will only continue if the lower rate is made permanent. This Article challenges that assumption. Using finance theory and empirical evidence from the U.S. and other countries, this Article shows that the relationship between dividends and taxes over the long run is more complex than dividend tax cut proponents suggest. Because the 2003 tax cut was only a temporary cut, making it permanent may actually have an effect that is opposite of what is intended. The implication is not that a temporary tax cut is preferable to a permanent one, but rather that the attempt to influence corporate behavior through the tax laws should be resisted as either futile or potentially counterproductive.

Elucidation of Retarding Effects of Sulfur and Nitrogen Compounds on Aromatic Compounds Hydrogenation

We investigated the phenanthrene (PHE) hydrogenation (HYD) reaction over a Ni−Mo/Al2O3 and a Pt−Pd/Al2O3 catalyst. The catalyst deactivation in the presence of dibenzothiophene (DBT) and/or acridine (ACR) was studied. Near 300 °C, the main product of the PHE HYD reaction was 1,2,3,4,5,6,7,8-octahydrophenanthrene (1,8-OHP) in the case of the NiMo catalyst and perhydrophenanthrene (PHP) in the case of the PtPd catalyst. Further, the PHE conversion over the NiMo catalyst in the presence of DBT slightly increased with decreasing the DBT concentration (from 1 to 0 wt %). However, the reintroduction of DBT in the feed after a temporary cut did not permit recovery of the initial PHE HYD and DBT hydrodesulfurization (HDS) conversions. It was deduced that the mixed NiMoS phase deteriorated when no sulfur was present in the feed. In the case of the PtPd catalyst, the PHE conversion increased when the DBT concentration decreased. Further, the initial conversions (PHE HYD and DBT HDS) observed after a temporary DBT feed cut and a subsequent DBT reintroduction were substantially recovered. Indeed, contrary to the NiMo catalyst, the PtPd catalyst activity was hindered when sulfur was present in the system, while the absence of sulfur permitted regeneration of the active phase by reduction. In a second part, the effect of the ACR introduction was studied. The ACR introduction led to a drastic decrease in the PHE conversion over the Ni−Mo/Al2O3 catalyst while the decrease was less pronounced over the PtPd catalyst. At the same time, unlike the NiMo catalyst, the Pt−Pd/Al2O3 catalyst showed a drastic decrease in CHB yield (poisoning of the HYD active sites) leading to a drastic decrease in DBT conversion. Moreover, on both catalysts the activity was not fully recovered after the ACR feed was cut, indicating that some HYD catalytic sites were permanently poisoned.

Isotopic tracing of the dissolved U fluxes of Himalayan rivers: implications for present and past U budgets of the Ganges-Brahmaputra system

U activity ratios have been measured in the dissolved loads of selected rivers from the Himalayan range, in Central Nepal, and from the Bangladesh, as well as in some rain waters. A few European and Asian rivers have also been analyzed for their U activity ratios. The data confirm the negligible effect of rainwater on the budget of dissolved U in river waters. The results also indicate that rivers on each Himalayan structural unit have homogeneous and specific U isotope compositions: i) (234U/238U) activity ratios slightly lower than unity in the dissolved load of the streams draining the Tethyan Sedimentary Series (TSS); ii) values slightly higher than unity for waters from the High Himalaya Crystalline (HHC) and the Lesser Himalaya (LH); iii) systematically higher (234U/238U) activity ratios for waters from the Siwaliks. Thus, U activity ratios, in association with Sr isotopic ratios, can be used to trace the sources of dissolved fluxes carried by these rivers. Coupling of U with Sr isotope data shows (1) that the U carried by the dissolved load of the Himalayan rivers mainly originates from U-rich lithologies of the TSS in the northern formations of the Tibetan plateau; and (2) that the elemental U and Sr fluxes carried by the Himalayan rivers at the outflow of the highlands are fairly homogeneous at the scale of the Himalayan chain. Rivers flowing on the Indian plain define a different trend from that of the Himalayan rivers in the U-Sr isotopic diagram, indicating the contribution of a specific floodplain component to the U and Sr budgets of the Ganges and the Brahmaputra. The influence of this component remains limited to 10 to 15 percent for the U flux, but can contribute 35 to 55% of the Sr flux. The variations of the Sr and U fluxes of the Ganges-Brahmaputra river system in response to climatic variations have been estimated by assuming a temporary cut off of the chemical fluxes from high-altitude terrains during glacial episodes. This scenario would significantly decrease the dissolved U flux of the Ganges-Brahmaputra river system and increase its U activity ratio. Such a climatic dependence of the Himalayan U flux could induce a periodic variation of the mean U activity ratio of the world rivers on glacial-interglacial timescales

The Effects of Fiscal Policy in a Two-Country World Economy: An Intertemporal Analysis

This paper analyzes the effects of fiscal policy using a two-country general equilibrium model. A key finding is that a shift in government spending from productive purchases to consumption purchases causes a rising trade deficit and an appreciation of the terms of trade, consistent with the U.S. experiences in the 1980s. Productive public services play a critical role in these adjustments by driving a wedge between the rates of return on domestic and foreign capital. A temporary cut in the capital income tax is also crucial for explaining a persistent trade deficit and an appreciation of the terms of trade. Copyright 1995 by Ohio State University Press.

Temporary cuts in government spending as an anti-inflationary device

We examine an open one-good economy where money is kept for transactions purposes, the tax base is elastic to the tax rate, and the financial markets are well integrated. It is shown that a sharp but temporary cut in government spending gets inflation down.

The present pension system in Russia: Funding and regulations

The great changes that affected the political and economic spheres in the ex-USSR led to a complete reform of Russia's social security system. Two main factors are to be considered: i) the dismantling of the old economic structure, especially administrative controls over prices and pay, with a subsequent restructuring of income distribution and ii) the transition to a new economic structure which implies a temporary cut in the purchasing power and standard of living of a large part of the population, especially the more vulnerable groups such as pensioners. Social security and welfare are issues of paramount importance. This is clearly shown by the growing impact of welfare expenses on national income and the social expense for consumption (see Table 1). The cost of welfare is growing also because the average age of the population is rising; the total number of people entitled to receive pensions is growing (see Table 2); and welfare is expanding its scope, improving its standards and including new forms of security. Table 1 shows that the incidence of welfare spending over domestic income and social consumption funds rose from 6.8% and 36.3% in 1960 to 12% and 42% in 1989 respectively. Over the period covered by the data, welfare spending increased almost eightfold a t a faster rate than that of national income. In the period 1980-1989 the population in the USSR grew from 266.6 to 288.6 million, that is a 8.3% increase while the number of pensioners grew from 50.2 to 59.7 million people, an 18.9% rise. This is the political, social and economic background against which the Republic of Russia took its legislative moves to completely reform its pension system. | t tackled the questions of elaborating better regulations and funding wider pension rights and higher payments to the individual. The present paper discusses some important aspects of Russia's Pension Fund; its legal innovations with respect to the old Soviet system and the condition of the Fund a year after its introduction.