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Discounting the Long-Distant Future: A Simple Explanation for the Weitzman-Gollier-Puzzle

Buchholz, Wolfgang; Schumacher, Jan - CESifo - 2008

In this paper, we reconsider the debate on Weitzman's (1998) suggestion to discount the long-run future at the lowest possible rate, referring to Gollier (2004) and Hepburn & Groom (2007). We show that, while Weitzman's use of the present value approach may indeed seem questionable, its outcome,...

Persistent link: https://www.econbiz.de/10005181518

Political Competition, Tax Salience and Accountability: Theory and Some Evidence from Italy

Bracco, Emanuele; Porcelli, Francesco; Redoano, Michela - CESifo - 2013

This paper argues that high political competition does not necessarily induce policy makers to perform better as previous research has shown. We develop a political economy model and we show that when political competition is tight, and elected politicians can rely on more tax instruments, they...

Persistent link: https://www.econbiz.de/10010877811

Does Public Education Expansion Lead to Trickle-Down Growth?

Böhm, Sebastian; Grossmann, Volker; Steger, Thomas - CESifo - 2014

The paper revisits the debate on trickle-down growth in view of the widely discussed evolution of the earnings and income distribution that followed a massive public expansion of higher education. We propose a dynamic general equilibrium model to dynamically evaluate whether economic growth...

Persistent link: https://www.econbiz.de/10010948861

Incumbent Effects and Partisan Alignment in Local Elections: A Regression Discontinuity Analysis Using Italian Data

Bracco, Emanuele; Porcelli, Francesco; Redoano, Michela - CESifo - 2013

This paper provides a simple model to explain effect of political alignment between different tiers of government on policy choices and election outcomes. We derive precise predictions that, as long as voters attribute most of the credit for providing public goods to the local government: (i)...

Persistent link: https://www.econbiz.de/10010603855

Dynamically Optimal R&D Subsidization

Grossmann, Volker; Steger, Thomas; Trimborn, Timo - CESifo - 2010

Previous research on optimal R&D subsidies has focussed on the long run. This paper characterizes the optimal time path of R&D subsidization in a semi-endogenous growth model, by exploiting a recently developed numerical method. Starting from the steady state under current R&D subsidization in...

Persistent link: https://www.econbiz.de/10008498993

Quantifying Optimal Growth Policy

Grossmann, Volker; Steger, Thomas; Trimborn, Timo - CESifo - 2010

The optimal mix of growth policies is determined within a comprehensive endogenous growth model. The analysis captures important elements of the tax-transfer system and accounts for transitional dynamics. Currently, for calculating corporate taxable income US firms are allowed to deduct...

Persistent link: https://www.econbiz.de/10008572585

Intergovernmental Grants as Signals and the Alignment Effect: Theory and Evidence

Bracco, Emanuele; Lockwood, Benjamin; Porcelli, Francesco; … - CESifo - 2015

This paper provides a simple political agency model to explain the effect of political alignment between different tiers of government on intergovernmental grants and election outcomes. Key features of the model are: (i) rational voters interpret public good provision as a signal of incumbent...

Persistent link: https://www.econbiz.de/10011167132

The Macroeconomics of TANSTAAFL

Grossmann, Volker; Steger, Thomas; Trimborn, Timo - CESifo - 2011

This paper shows that dynamic inefficiency can occur in dynamic general equilibrium models with fully optimizing, infinitely-lived households even in a situation with underinvestment. We identify necessary conditions for such a possibility and illustrate it in a standard R&D-based growth model....

Persistent link: https://www.econbiz.de/10009371354

The Malleability of Undiscounted Utilitarianism as a Criterion of Intergenerational Justice

Asheim, Geir B.; Buchholz, Wolfgang - CESifo - 2000

Undiscounted utilitarianism as a criterion of intergeneration justice has been questioned for different reasons: It has … allocation must involve discounting, and (2) that undiscounted utilitarianism subjects the present generation to heavy demands …-nologies) that undiscounted utilitarianism is so malleable that any efficient and non-decreasing allocation can be the unique optimum …

Persistent link: https://www.econbiz.de/10005405840