scholarly journals Retirement Financing: An Optimal Reform Approach

Econometrica ◽  
2019 ◽  
Vol 87 (4) ◽  
pp. 1205-1265 ◽  
Author(s):  
Roozbeh Hosseini ◽  
Ali Shourideh
Keyword(s):  
Optimal Policy ◽  
Pareto Optimal ◽  
Policy Reforms ◽  
Tax Reforms ◽  
Heterogeneous Agent ◽  
Yield Efficiency ◽  
Lump Sum ◽  
The Status ◽  
Initial Generation ◽  
Tax And Transfer System

We study Pareto optimal policy reforms aimed at overhauling retirement financing as an integral part of the tax and transfer system. Our framework for policy analysis is a heterogeneous‐agent overlapping‐generations model that performs well in matching the aggregate and distributional features of the U.S. economy. We present a test of Pareto optimality that identifies the main source of inefficiency in the status quo policies. Our test suggests that lack of asset subsidies late in life is the main source of inefficiency when annuity markets are incomplete. We solve for Pareto optimal policy reforms and show that progressive asset subsidies provide a powerful tool for Pareto optimal reforms. On the other hand, earnings tax reforms do not always yield efficiency gains. We implement our Pareto optimal policy reform in an economy that features demographic change. The reform reduces the present discounted value of net resources consumed by each generation by about 7 to 11 percent in the steady state. These gains amount to a one‐time lump‐sum transfer to the initial generation equal to 10.5 percent of GDP.

scholarly journals Optimality of index policies for stochastic scheduling with switching penalties

1992 ◽  
Vol 29 (04) ◽  
pp. 957-966 ◽  
Author(s):  
Mark P. Van Oyen ◽  
Dimitrios G. Pandelis ◽  
Demosthenis Teneketzis
Keyword(s):  
Optimal Policy ◽  
Time Delays ◽  
Stochastic Scheduling ◽  
Optimal Scheduling ◽  
Scheduling Policies ◽  
Parallel Queues ◽  
Lump Sum ◽  
Index Policies ◽  
Service Policy ◽  
The Impact

We investigate the impact of switching penalties on the nature of optimal scheduling policies for systems of parallel queues without arrivals. We study two types of switching penalties incurred when switching between queues: lump sum costs and time delays. Under the assumption that the service periods of jobs in a given queue possess the same distribution, we derive an index rule that defines an optimal policy. For switching penalties that depend on the particular nodes involved in a switch, we show that although an index rule is not optimal in general, there is an exhaustive service policy that is optimal.

On “Dynastic” Inequality

2021 ◽  
Author(s):  
Daniel Halliday ◽  
Miranda Stewart
Keyword(s):  
Birth Cohort ◽  
Tax Policy ◽  
Material Distribution ◽  
Policy Reforms ◽  
Tax Reforms ◽  
Single Generation ◽  
Philosophical Foundations ◽  
Developed Economies ◽  
Causal Mechanisms

This chapter investigates whether the replication of inequality is, other things being equal, morally objectionable in ways not applicable to inequality that remains confined to a single generation or “birth cohort.” The focus is both theoretical and practical. The chapter considers the philosophical foundations that might lie behind an objection to dynastic inequality, negotiating the diversity of egalitarian views supporting this position and the complexity around the causal mechanisms at work in cases where inequality has a dynastic tendency. It then discusses the policy reforms that might target inequalities that replicate old distributive trends while leaving newly produced trends more intact, with a focus on tax policy. Current tax rules in most developed economies do not make a distinction between new and old influences on the material distribution. Accordingly, it is likely that the tax reforms implied could be quite extensive.

ALTERNATIVE MONETARY POLICIES IN A TURNPIKE ECONOMY

2010 ◽  
Vol 14 (5) ◽  
pp. 727-762 ◽  
Author(s):  
Rodolfo Manuelli ◽  
Thomas J. Sargent
Keyword(s):  
Money Supply ◽  
Optimal Policy ◽  
Optimal Allocation ◽  
Price Level ◽  
Optimal Rate ◽  
Pareto Optimal ◽  
Monetary Policies

This paper modifies a Townsend turnpike model by letting agents stay at a location long enough to trade some consumption loans, but not long enough to support a Pareto-optimal allocation. Monetary equilibria exist that are nonoptimal in the absence of a scheme to pay interest on currency at a particular rate. Paying interest on currency at the optimal rate delivers a Pareto-optimal allocation, but a different one than the allocation for an associated nonmonetary centralized economy. The price level remains determinate under an optimal policy. We study the response of the model to “helicopter drops” of currency, steady increases in the money supply, and restrictions on private intermediation.

OPTIMAL POLICY IN COLLATERAL CONSTRAINED ECONOMIES

2017 ◽  
Vol 23 (2) ◽  
pp. 798-836 ◽  
Author(s):  
Nina Biljanovska
Keyword(s):  
Optimal Policy ◽  
Competitive Equilibrium ◽  
Policy Instruments ◽  
Policy Recommendations ◽  
Tax Rates ◽  
Second Best ◽  
Collateral Constraints ◽  
Income Transfers ◽  
Lump Sum ◽  
Distortionary Taxes

This paper examines optimal policy in a macroeconomic model with collateral constraints. Binding collateral constraints yield inefficient competitive equilibrium allocations because they distort the optimal utilization of real resources. I identify the set of policy instruments that can be used by a Ramsey planner to achieve the first-best and the second-best (i.e., constrained planner's) allocations. A system of distortionary taxes on capital and labor income, along with direct lump-sum transfers among borrowers and lenders replicates the first-best outcome. The tax rates correct for the marginal distortions, whereas the direct lump-sum transfers perform income redistributions among the agents. In absence of direct lump-sum transfers, the distortionary taxes have an additional role, i.e., to perform implicit income transfers, and only second-best outcomes are attainable. I also derive the optimal policy in response to real and financial shocks, and show how the policy recommendations differ depending on the set of policy instruments available.

scholarly journals Optimal stochastic scheduling of forest networks with switching penalties

1994 ◽  
Vol 26 (02) ◽  
pp. 474-497 ◽  
Author(s):  
Mark P. Van Oyen ◽  
Demosthenis Teneketzis
Keyword(s):  
Structural Properties ◽  
Optimal Policy ◽  
Switching Costs ◽  
Stochastic Scheduling ◽  
Single Server ◽  
Reward Rate ◽  
Holding Costs ◽  
Lump Sum ◽  
Optimal Policies ◽  
Set Up

We present structural properties of optimal policies for the problem of scheduling a single server in a forest network of N queues (without arrivals) subject to switching penalties. In addition to linear holding costs, we impose either lump sum switching costs or batch set-up delays which are incurred at each instant the server processes a job in a queue different from the previous one. We use reward rate notions to unearth conditions on the holding costs and service distributions for which an exhaustive policy is optimal. For the case of two nodes connected probabilistically in tandem, we explicitly define an optimal policy under similar conditions.

scholarly journals Brexit’s Shades of Green—(Missing) the Opportunity to Transform Farming in England?

2019 ◽  
Vol 31 (3) ◽  
pp. 413-441
Author(s):  
Helena R Howe ◽  
Malcolm Ross
Keyword(s):  
Environmental Sustainability ◽  
Ecological Factors ◽  
Farming System ◽  
Critical Threshold ◽  
Transformative Change ◽  
Policy Reforms ◽  
Shape Transformation ◽  
The Status ◽  
Farming Policy ◽  
The Uk

Abstract The UK Government’s ‘green Brexit’ includes fundamental reform of agriculture. We use resilience thinking to examine the complex relationship between farming policy and environmental sustainability. Farming is a social ecological system that will be disturbed by leaving the EU’s Common Agricultural Policy. Reforms could reinforce persistence of the status quo or shape transformation to ‘better’ sustainability. We argue Brexit is a once-in-a-generation opportunity for the hegemony of sustainable intensification to be challenged by enhanced agroecological farming practices. The interdependency of social and ecological factors is a critical threshold for transformative change, which we explore through three key sites of struggle: farmers’ cultural identity, connection to land, and security. We suggest transformative law and governance measures built upon Wild Law jurisprudence and resilience principles of diversity, scale, flexibility, relationality, education and participatory decision-making. We conclude that the Government’s approach falls short of the transformation needed for a resilient, sustainable farming system.

Environmental Tax Policy Reforms in the European Union

2017 ◽  
pp. 318-329
Author(s):  
Charalambos Louca
Keyword(s):  
European Union ◽  
Tax Policy ◽  
Green Economy ◽  
Environmental Taxes ◽  
Environmental Tax ◽  
The European Union ◽  
Policy Reforms ◽  
Tax Reforms ◽  
Fiscal Reform ◽  
Policy System

This chapter provides an overview of the environmental tax policy system in the European Union. The different kinds of environmental taxes, their quantitative use in the member states as well as the factors that influence the potential for tax reforms are explained. Reference is also made as to how environmental fiscal reforms can contribute to a Green Economy. The principles and the motivational factors for an Environmental Fiscal Reform (EFR) are explained. The experiences and the practices of European and Asian countries are presented and policy lessons learnt are drawn. Finally the chapter concludes by referring to the environmental fiscal reform prospects.

scholarly journals How Should Tax Progressivity Respond to Rising Income Inequality?

2020 ◽  
Vol 18 (6) ◽  
pp. 2715-2754
Author(s):  
Jonathan Heathcote ◽  
Kjetil Storesletten ◽  
Giovanni L Violante
Keyword(s):  
Technical Change ◽  
Good Description ◽  
The United States ◽  
Market Model ◽  
Heterogeneous Agent ◽  
Tax Progressivity ◽  
Flexible Labor ◽  
The Us ◽  
Tax And Transfer System ◽  
Log Linear

Abstract We address the question in the title in a heterogeneous-agent incomplete-market model featuring exogenous idiosyncratic risk, endogenous skill investment, and flexible labor supply. The tax and transfer schedule is restricted to being log-linear in income, a good description of the US system. Rising inequality is modeled as a combination of skill-biased technical change and growth in residual wage dispersion. When facing shifts in the income distribution like those observed in the United States, a utilitarian planner chooses higher progressivity in response to larger residual inequality but lower progressivity in response to widening skill price dispersion reflecting technical change. Overall, optimal progressivity is approximately unchanged between 1980 and 2016. We document that the progressivity of the actual US tax and transfer system has similarly changed little since 1980, in line with the model prescription.

Doomed to disagree? Party-voter discipline and policy gridlock under divided government

2010 ◽  
Vol 17 (6) ◽  
pp. 801-822 ◽  
Author(s):  
José Fernández-Albertos ◽  
Víctor Lapuente
Keyword(s):  
Latin American ◽  
Status Quo ◽  
One Dimension ◽  
Veto Players ◽  
Divided Government ◽  
Policy Reforms ◽  
Low Degree ◽  
The Status ◽  
Party Institutionalization

This article explains the existence of policy gridlock in systems with divided government, even when there are policies that are universally preferred to the status quo. It is shown analytically that one dimension of party institutionalization (the degree of party-voter discipline) may create incentives for veto players to block policies that, ideologically, they might like. This is the case because when party attachments dominate voters' behaviour across different electoral arenas, veto players in the opposition might find it in their electoral interests to prevent popular policies from being adopted. We illustrate our argument by analysing the recent experiences of two Latin American democracies living under divided government but with opposite levels of party-voter discipline: Mexico and Brazil. Contrary to the received wisdom, the low degree of party institutionalization in Brazil may have helped the passing of comprehensive policy reforms, whereas strongly institutionalized parties in Mexico might have been partly responsible for the persistence of policy gridlock.

Reconstituting the Submerged State: The Challenges of Social Policy Reform in the Obama Era

2010 ◽  
Vol 8 (3) ◽  
pp. 803-824 ◽  
Author(s):  
Suzanne Mettler
Keyword(s):  
Political Communication ◽  
Higher Education Policy ◽  
Policy Design ◽  
Policy Reforms ◽  
Political Capacity ◽  
Federal Policies ◽  
Social Policy Reform ◽  
The Status ◽  
Redistributive Effects ◽  
Private Actors

President Barack Obama came into office with a social welfare policy agenda that aimed to reconstitute what can be understood as the “submerged state”: a conglomeration of existing federal policies that incentivize and subsidize activities engaged in by private actors and individuals. By attempting to restructure the political economy involved in taxation, higher education policy, and health care, Obama ventured into a policy terrain that presents immense obstacles to reform itself and to the public's perception of its success. Over time the submerged state has fostered the profitability of particular industries and induced them to increase their political capacity, which they have exercised in efforts to maintain the status quo. Yet the submerged state simultaneously eludes most ordinary citizens: they have little awareness of its policies or their upwardly redistributive effects, and few are cognizant of what is at stake in reform efforts. This article shows how, in each of the three policy areas, the contours and dynamics of the submerged state have shaped the possibilities for reform and the form it has taken, the politics surrounding it, and its prospects for success. While the Obama Administration won hard-fought legislative accomplishments in each area, political success will continue to depend on how well policy design, policy delivery and political communication reveal policy reforms to citizens, so that they better understand how reforms function and what has been achieved.

Sign in / Sign up

Export Citation Format

Share Document