Most studies on the economic consequences of ageing rely on Computable General Equilibrium (CGE) models that account for feedback mechanisms through changes in relative prices, tax bases etc. However, since individual labour supply behaviour is considered to be a key element in CGE-analyses of...

We use a CGE model to estimate the social cost of a marginal increase in public expenditure in Norway. Norway exemplifies an economy with high taxes. Distortionary taxes imply wedges between the market prices and the corresponding shadow prices. The shadow prices are unobservable, which is the...

The purpose of this paper is to present an exercise where we identify optimal income tax rules under the constraint of fixed tax revenue. To this end, we estimate a microeconomic model with 78 parameters that capture heterogeneity in consumption-leisure preferences for singles and couples as...

Given that structural labor supply models continue to play a key role in the process of policy design, it is important to validate their capacity to provide reasonable predictions of alternative hypothetical policy options. Comparing outcomes before and after a realized policy change (such as a...

At the initial stage of this project, the project group consisted of Asbjørn Aaheim, Magnus Hatlebakk and the authors. The authors are grateful for the discussion with the other project participants at this stage. We also had very useful discussion with the marine researcher Sigurd Tjelmeland...

The efficient auction is designed to induce truthful bidding for bidders with affiliated values. Herein we implement the auction in the lab, and observe that inexperienced people can bid systematically in this more complex environment, albeit yielding a flatter bid function than the truthful.

In a recent article Bas Jacobs found that the marginal cost of public funds (MCF) is one when taxation gives second best resource allocation. This conclusion is based on a claim that there are certain shortcomings with the standard definition of MCF, for example that the size and sign of the...

In this paper we provide a formal analysis to evaluate the subtraction of defensive expenditures from GDP. We consider expenditures that are used to produce non- market goods as candidates for being subtracted from GDP. It will be demonstrated that income net such expenditures will account for...

This paper discusses and shows how a CGE model can be used to assess welfare effects of structural policy reforms targeting inefficiency problems at micro levels that normally are not captured in operational CGE-models. The CGE approach allows computation of shadow prices which are generally...

This paper provides a new and improved measure of the marginal cost of public funds (MCF). It is based on a benchmark tax which is distributionally neutral and non-distortive. This is in contrast to the MCF-measure used in the previous literature, that has used the regressive uniform lump-sum...