scholarly journals Income and Substitution Effects of Estate Taxation

2013 ◽  
Vol 103 (3) ◽  
pp. 484-488 ◽  
Author(s):  
James R Hines
Keyword(s):  
Labor Supply ◽  
Empirical Evidence ◽  
Substitution Effect ◽  
Relative Price ◽  
Substitution Effects ◽  
Price Changes ◽  
Estate Tax ◽  
Income Effects ◽  
Estate Taxation ◽  
Estate Taxes

This paper evaluates the effect of estate taxes on labor supply. The analysis decomposes the effect of estate taxation into the substitution effect of relative price changes and the two income effects for which the estate tax is responsible. These two income effects arise from tax burdens on those who leave estates plus tax burdens on those who receive them. Despite the double income burden of the estate tax, existing empirical evidence suggests that the net effect of estate taxation on aggregate labor supply is uncertain.

scholarly journals Annuity Markets and Capital Accumulation

2019 ◽  
Vol 20 (1) ◽  
Author(s):  
Shantanu Bagchi ◽  
James A. Feigenbaum
Keyword(s):  
Old Age ◽  
Capital Stock ◽  
Early Life ◽  
Capital Accumulation ◽  
Substitution Effect ◽  
Income Effect ◽  
Substitution Effects ◽  
Income Effects ◽  
Annuity Markets ◽  
The One

AbstractWe examine how the absence of annuities in financial markets affects capital accumulation in a two-period overlapping generations model. Our findings indicate that the effect on capital is ambiguous in general equilibrium, because there are two competing mechanisms at work. On the one hand, the absence of annuities increases the price of old-age consumption relative to the price of early-life consumption. This induces a substitution effect that reduces saving and capital, and an income effect that has the opposite effect as households want to consume less when young, causing them to save more. On the other hand, accidental bequests originate from the assets of the deceased under missing annuity markets. The bequest received in early life always has a positive income effect on saving, but the bequest received in old age, conditional on survival, is effectively a partial annuity with both substitution and income effects. We find that when the desire to smooth consumption is high, the income effects dominate, so the capital stock always increases when annuity markets are missing. However, when the desire to smooth consumption is low, the substitution effects dominate, and the capital stock decreases with missing annuity markets.

Inflation and the Skewness of the Distribution of Relative Price Changes: Empirical Evidence for Germany / Inflation und die Schiefe der Verteilung relativer Preisänderungen: Empirische Evidenz für Deutschland

2003 ◽  
Vol 223 (2) ◽  
Author(s):  
Jörg Döpke ◽  
Christian Pierdzioch
Keyword(s):  
Empirical Evidence ◽  
Inflation Rate ◽  
Phillips Curve ◽  
Explanatory Variable ◽  
Relative Price ◽  
Annual Data ◽  
Structural Vector Autoregression ◽  
Price Changes ◽  
Present Evidence ◽  
Structural Vector

SummaryThe paper uses German annual data covering the period 1969-2000 to present evidence on the link between aggregate inflation and the skewness of the distribution of relative price changes. Our empirical results are mixed. Our regression-based analyses suggest that the skewness of the distribution of relative price changes may be an explanatory variable for the inflation rate. Our empirical evidence in favor of the hypothesis that the skewness measure may help to explain shifts in the Phillips curve is somewhat weaker. Moreover, a structural vector autoregression reveals that the skewness may help to explain the dynamics of real output. At the same time, however, demand shocks seem to explain a non-negligible proportion of the variation of the skewness.

Demand for Value Added and Value-Added Exchange Rates

2017 ◽  
Vol 9 (4) ◽  
pp. 45-90 ◽  
Author(s):  
Rudolfs Bems ◽  
Robert C. Johnson
Keyword(s):  
Value Added ◽  
Relative Price ◽  
Real Effective Exchange Rate ◽  
Price Changes ◽  
Elasticity Of Demand ◽  
Cross Border ◽  
Expenditure Switching ◽  
Effective Exchange ◽  
Effective Exchange Rate

We examine how cross-border input linkages shape the response of demand for value added to international relative price changes. We define a novel value-added real effective exchange rate (REER), which aggregates bilateral value-added price changes. Spillovers via input linkages lower the sensitivity of the value-added REER to price changes by supply chain partners because they counterbalance demand-side expenditure switching. Input linkages also raise the price elasticity of demand relative to the conventional REER framework, making demand more sensitive to REER changes. Using global input-output data, we demonstrate that these conceptual insights are quantitatively important in a case study of European competitiveness. (JEL E31, F23, F31, L14)

scholarly journals Marriage and Marriage Markets

2017 ◽  
pp. 54-74
Author(s):  
Shoshana Grossbard
Keyword(s):  
Labor Market ◽  
Sex Ratio ◽  
Labor Supply ◽  
Empirical Evidence ◽  
Sex Ratios ◽  
Economic Models ◽  
Marriage Markets ◽  
Gary Becker ◽  
Marriage Formation ◽  
The Impact

This chapter reviews models of marriage, with special emphasis on how the sex ratio can help explain outcomes such as marriage formation, the intramarriage distribution of consumption goods, labor supply, savings, type of relationship, divorce, and intermarriage. Economic models of marriage pioneered by Gary Becker are reviewed in the first section and then extended in the next section to incorporate the labor market for the work-in-household approach of Grossbard. The following section discusses challenges in identifying exogenous variation in sex ratios and presents empirical evidence on the impact of sex ratios on labor supply, consumption, savings, and several other outcomes.

scholarly journals Endogenous Tradability, International Relative Prices, and the International Transmission of Business Cycles

2019 ◽  
Vol 11 (3) ◽  
pp. 111
Author(s):  
Soojae Moon
Keyword(s):  
Business Cycles ◽  
Labor Supply ◽  
Product Differentiation ◽  
Physical Capital ◽  
Dynamic Stochastic General Equilibrium ◽  
Relative Price ◽  
Relative Prices ◽  
Dynamic Stochastic ◽  
Elastic Labor Supply ◽  
Endogenous Tradability

This paper propose a two-country, dynamic, stochastic, general equilibrium (DSGE) model with endogenous tradability, product differentiation, variously determined physical capital, and an elastic labor supply to explore the propagation of business cycles across countries. The model successfully addresses international relative price dynamics (its appreciation with positive home productivity shock, called the ‘Harrod-Balassa-Samuelson Effect’) through the entry of producers and their cut-off productivities of exporting. The use of endogenous physical capital in the model induces a more realistic framework since the simulated model is compared to the U.S. investment data that covers spending on capital equipment, structures and inventories for producers’ entry and exit dynamics. Building the model with endogenous capital and elastic labor supply weakens the volatility of investment compared to conventional international real business cycle (IRBC) models. The model also accounts for several features of the data, such as the volatility of aggregate variables and their correlations with GDP.

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