This paper reports on discussions at the Workshop on Macroeconomic Policy Effectiveness held at the OECD in Paris in June 1981.

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The present paper develops a model of exchange rate and price level determination as the simultaneous solution to goods and asset market equilibrium in conjunction with purchasing power parity. Exchange rate changes operate through income, wealth and substitution effects to have real...

Corporate tax with interest deductibility may reduce risk taking because entrepreneurs might decrease the amount of investment in risky projects with higher corporate tax rates. Unlike Stiglitz' "Corporation Tax", we allow for decreasing returns to scale and equity financing of capital. We show...

Spanning conditions are given for an economy where individuals exchange shares of firms indirectly through financial intermediaries rather than directly in stock markets. Allowing for short sales, securities offered by financial intermediaries will span if there are as many linearly independent...

Canadian public-private mixed enterprises are examined in relation to two objectives the government may pursue: the provision of risk capital and the coordination of the technological development of an industry. There may be a role for a government in co-ordinating plans of an industry by...

The costs of capital and marginal tax rates are derived in a two period model with technical uncertainty for investments subject to imperfect loss offset corporate and personal taxation. Data based on the experience of Canadian corporations are used to estimate the present value of tax benefits...

Corporate taxation as a means of encouraging risk taking is not required in a stock market economy but would raise social welfare in "farm" economies. If lumpsum transfers are not feasible, a corporate tax should take into account distributional effects of taxing wealth, but, in a stock market...