Clemens Fuest

Clemens Fuest is Research Director of the Oxford University Centre for Business Taxation and Professor of Business Taxation at Oxford's Saïd Business School.

  • Critical Issues in Taxation and Development

    Critical Issues in Taxation and Development

    Clemens Fuest and George R. Zodrow

    Experts analyze the policy challenges of taxation in developing countries, including corruption, tax evasion, and ineffective political structures.

    Many developing countries find it difficult to raise the revenue required to provide such basic public services as education, health care, and infrastructure. Complicating the policy challenges of taxation in developing countries are issues that most developed countries do not face, including widespread corruption, tax evasion and tax avoidance, and ineffective political structures. In this volume, experts investigate crucial challenges confronted by developing countries in raising revenue.

    After a comprehensive and insightful overview, each chapter uses modern empirical methods to study a single critical issue essential to understanding the effects of taxes on development. Topics addressed include the effect of taxation on foreign direct investment; forms of corruption, tax evasion, and tax avoidance that are specific to developing countries; and issues related to political structure, including the negative effects of fiscal decentralization on the effectiveness of developmental aid and the relationship between democracy and taxation in Asian, Latin American, and European Union countries that have recently experienced both political and economic transitions.

    Contributors Clemens Fuest, Timothy Goodspeed, Shafik Hebous, Michael Keen, Christian Lessmann, Boryana Madzharova, Giorgia Maffini, Gunther Markwardt, Jorge Martinez-Vazquez, Paola Profeta, Riccardo Puglisi, Nadine Riedel, Simona Scabrosetti, Johannes Stroebel, Mirco Tonin, Arthur van Benthem, Li Zhang, George Zodrow

    • Hardcover $8.75 £6.99

Contributor

  • The WTO and Economic Development

    Ben Zissimos

    Economists offer rigorous quantitative analyses of how the institutional design and purpose of the WTO (and its progenitor, the GATT) affect economic development.

    The World Trade Organization (WTO) was established partly to support economic development in developing countries through international trade. This goal has been elusive, with some questioning the WTO's ability to achieve such a goal. In this volume, leading scholars in the economics of international trade offer rigorous quantitative analyses of how the institutional design and purpose of the WTO (and its progenitor, the GATT) affect economic development.

    The volume begins with analyses of market access concessions that have been or could be exchanged between developing and developed countries, from a formal framework for incorporating non-tariff measures into a model for analyzing a multilateral trade agreement to an examination of the MFN (most-favored nation) free rider problem. Contributors then develop new theoretical and econometric approaches for understanding key aspects of trade liberalization under the GATT/WTO that are of particular relevance to economic development, considering such topics as achieving cooperation in eliminating prohibitive trade barriers and the effect of China's export subsidies on its dramatic growth in exports. Finally, the book considers two significant new issues that arose from the Uruguay round, from which the WTO was formed: the TRIPS agreement, regulating intellectual property; and the resolution of trade disputes with and without litigation. Taken together, these analyses shed new light on the relationship between trade liberalization and economic development as well as the WTO's effectiveness.

    • Hardcover $60.00 £50.00
  • Disrupted Economic Relationships

    Disrupted Economic Relationships

    Disasters, Sanctions, Dissolutions

    Tibor Besedeš and Volker Nitsch

    Empirical studies and theoretical analyses examine the causes and consequences of disruptions in cross-border economic relationships, including political conflict, economic sanctions, and institutional collapse.

    Cross-border economic relationships gradually strengthened in the decades after World War II; for most of the postwar period, international trade and investment have grown faster than output, a process often termed “globalization.” In recent years, however, economic relationships have grown more fragile, subject to disruption by such factors as political conflict, economic sanctions, and the dissolution of institutional arrangements. This timely CESifo volume offers empirical studies and theoretical analyses that examine the causes and consequences of these disrupted economic relationships.

    Contributors propose a new theoretical framework for understanding the economic impact of intergroup conflict and develop a predictive model to analyze the contagion of regional wars. They offer empirical studies of the economic effect of targeted sanctions and boycotts, including those imposed upon Iran, Russia, and Myanmar; argue provocatively that natural disasters are associated with increased international trade; analyze trade duration, finding previously identified explanatory factors to be insufficient for explaining variations in trade survival over time; and critically review the hypothesis that oil was a crucial factor in the collapse of the Soviet Union.

    Contributors Daniel P. Ahn, Tibor Besedeš, Kilian Heilmann, Wolfgang Hess, Julian Hinz, Melise Jaud, Tristan Kohl, Madina Kukenova, Chenmei Li, Rodney D. Ludema, Volker Nitsch, Maria Persson, Chiel Klein Reesink, Arthur Silve, Enrico Spolaore, Martin Strieborny, Marvin Suesse, Peter A. G. van Bergeijk, Thierry Verdier, Romain Wacziarg

    • Hardcover $40.00 £32.00
  • The Taxation of Pensions

    The Taxation of Pensions

    Robert Holzmann and John Piggott

    Theoretical and policy perspectives on the taxation of pension, viewed in an international context.

    Policy makers and academic researchers have been preoccupied in recent decades with the design of pension schemes and effective pension system reform. Relatively little attention has been given to the taxation of pensions and, more broadly, the provision of retirement income. In this book, experts from a range of countries explore the interconnection. Their contributions are especially timely, given recent demographic and political developments including population aging that lengthens the time between contribution payment and benefit receipt, the mobility of capital and labor brought about by globalization, and the complexity of pension taxation within and between countries. In shedding light on these issues, the chapters document the various forms of taxation of pension systems; use economic theory to explain both qualitative and quantitative observations; and consider whether the observed interaction of taxation and pensions is efficient. Theoretical overviews are followed by rigorous analyses of pension taxation in specific countries, including Denmark, Sweden, Portugal, Australia, Germany, the United Kingdom, and the United States.

    Contributors Torben M. Andersen, Spencer Bastani, Hazel Bateman, Sören Blomquist, Axel Börsch-Supan, Jorge Miguel Bravo, Gary Burtless, Rafal Chomik, Helmuth Cremer, Carl Emmerson, Csaba Feher, Bernd Genser, Robert Holzmann, Paul Johnson, Alain Jousten, Christian Keuschnigg, Eric Koepcke, George Kudrna, Jukka Lassila, Luca Micheletto, Pierre Pestieau, John Piggott, Christopher Quinn, Tarmo Valkonen, Alan Woodland

    • Hardcover $40.00 £32.00
  • The Economics of Philanthropy

    The Economics of Philanthropy

    Donations and Fundraising

    Kimberley Scharf and Mirco Tonin

    Experts bring economic tools to bear on philanthropic activities, addressing topics that range from the determinants of giving to the effectiveness of fundraising techniques.

    Economists are increasingly aware of the need to better understand philanthropic activities. In this book, economists address a variety of topics related to the economics of philanthropy, ranging from the determinants of giving to the effectiveness of fundraising techniques. The contributions focus on individual motives for giving and volunteering, and in particular how they affect donation outcomes, fundraising decisions, and public policies toward giving.

    Previous research has viewed motives for giving as embedded in formal models of economic behavior with rational agents who maximize their own utility while constrained by a budget. These models, however, have been shown to have poor predictive power, neglecting direct and indirect motives for giving. The contributors consider, among other subjects, the free-riding problem in these models; altruistic, direct, and indirect motives for giving, addressed both theoretically and with lab experiments; the linear public good game; the role of social information; the effectiveness of matching gifts and premiums; motives for unpaid volunteering; subscription models as a way to regulate revenue streams; and increasing reliance on public funds.

    Contributors James Andreoni, Jon Behar, Avner Ben-Ner, Ted Bergstrom, Greg Bose, Sarah Brown, Catherine C. Eckel, Christina Gravert, David H. Herberich, Samantha Horn, Fantingyu Hu, Dean Karlan, Ann-Kathrin Koessler, Benjamin M. Marx, Jonathan Meer, Michael Menietti, Bradley Minaker, Mark Ottoni-Wilhelm, A. Abigail Payne, Maria P. Recalde, Kimberley Scharf, Claudia Schwirplies, Marta Serra-Garcia, Sarah Smith, Karl Taylor, Mette Trier Damgaard, Lise Vesterlund, Laura Villalobos

    • Hardcover $32.00 £26.00
  • Developments in Global Sourcing

    Developments in Global Sourcing

    Wilhelm Kohler and Erdal Yalcin

    Theoretical and empirical perspectives on the fragmentation of production processes across borders, shedding light on global sourcing decisions and their economic effects.

    Recent decades have seen a fragmentation of production processes across borders, as firms find it increasingly profitable to organize production on a global scale. This fragmentation occurs across national borders as well as across firm boundaries; companies must decide not only the location of production but also how much control to exert over the different production stages. Economists have responded to this shift by developing new models of global sourcing, generating important insights into the driving forces and economic effects of this new form of globalization. Many questions, however, remain unanswered. This book tries to fill this gap.

    The contributors ask new questions or offer new modeling approaches to fragmentation of production, focusing in particular on time and uncertainty. They examine global sourcing in firms' multinationalization strategies, including offshoring, product scope, managerial incentives, supplier search, and contractual issues; and explore the interactions of global sourcing, exports, and economic development, investigating such topics as the complementarity of offshoring and exporting, product diversification, and the relationship between vertical linkages and development. Each chapter presents recent research that further develops existing models or documents new empirical patterns related to global sourcing.

    Contributors Pol Antràs, Sasan Bakhtiari, Sebastian Benz, Giuseppe Berlingieri, Johannes Boehm, Jeronimo Carballo, Huiya Chen, Alejandro Cuñat, Fabrice Defever, Swati Dhingra, Harald Fadinger, Ana P. Fernandes, Christian Fischer, Wilhelm Kohler, Bohdan Kukharskyy, Luca Marcolin, Antonio Minniti, John Morrow, Alireza Naghavi, Han (Steffan) Qi, Jens Suedekum, Deborah L. Swenson, Edwin L.-C. Lai, Anders Rosenstand Laugesen, Ngo Van Long, Heiwai Tang, Erdal Yalcin

    • Hardcover $40.00 £32.00
  • Demographic Change and Long-Run Development

    Demographic Change and Long-Run Development

    Matteo Cervellati and Uwe Sunde

    Recent approaches to economic demography, investigating the effect of the transition to low mortality and low fertility on economic development.

    Over the last two hundred years, mortality and fertility levels in the Western world have dropped to unprecedented levels. This demographic transition was accompanied by an economic transition that led to widespread education and economic growth after centuries of near-stagnation. At the same time, other changes have occurred in family structures, culture, and the organization of society. Economists have only recently begun to take into account the demographic transition from high mortality and high fertility when modeling and researching economic development. This CESifo volume reviews recent approaches to economic demography, considering such topics as the bio-geographic origins of comparative development differences, the role of health improvements and mortality decline, as well as physiological, familial, cultural, and social aspects.

    After an overview of the study of demography and economic demography, the chapters cover subjects including the Neolithic era and the period of the formation of states and social institutions; longevity and economic growth; household decision making and fertility; land inequality, education, and marriage in nineteenth century Prussia; and caste systems and technology in pre-modern societies. The book concludes with a call for further investigation of the institutional and social factors that influence demographics and economies, suggesting that unified growth theory offers a potential approach to studying development.

    Contributors Matteo Cervellati, Francesco Cinnirella, David de la Croix, Carl-Johann Dalgaard, Matthias Doepke, Elena Esposito, Davide Fiaschi, Tamara Fioroni, Oded Galor, Boris Gershman, Erik Hornung, Fabian Kindermann, Nils-Petter Lagerlöf, Holger Strulik, Uwe Sunde, David N. Weil

    • Hardcover $35.00 £28.00
  • Energy Tax and Regulatory Policy in Europe

    Energy Tax and Regulatory Policy in Europe

    Reform Priorities

    Ian Parry, Karen Pittel, and Herman Vollebergh

    Concise introductions to the main issues in energy policy and their interaction with environmental policies in the EU.

    The European Union (EU) faces critical challenges in energy policy making, the most pressing of which are how to achieve the deep greenhouse gas reductions promised at the December 2015 UN Conference of the Parties in Paris, and how this effort can be coordinated with already existing policies. Energy policy is primarily a member state responsibility, and policy makers need an overarching view of the main issues in energy policy and their interaction with environmental policies. This volume aims to fill this need, offering concise introductions to some of the major issues as well as practical suggestions for policy making.

    The contributors discuss reforms to the EU Emissions Trading System (ETS), the world's largest carbon market; ways to improve the operation and integration of the EU's power grids, in terms of both supply and demand; changes to the EU's Energy Tax Directive, which sets tax floors for fuels outside the ETS; the coordination of climate policies with policies to promote renewables and energy efficiency; research into clean technology; challenges to shale gas development; and transportation policy and the need for action on such externalities as traffic congestion. Finally, contributors consider obstacles to reform, including its potential effects on vulnerable households and energy-intensive industries.

    Contributors Mikael Skou Andersen, Niels Anger, Bruno De Borger, Antoine Dechezleprêtre, Jos Delbeke, Ottmar Edenhofer, Christian Flachsland, Beatriz Gaitan, Polona Gregorin, Cameron Hepburn, Alan Krupnick, Andreas Löschel, Claudio Marcantonini, Felix Christian Matthes, Paul Nahmmacher, Ian Parry, Karen Pittel, David Popp, Stef Proost, Christina Roolfs, Bert Saveyn, Oliver Schenker, Stephen Smith, Alexander Teytelboym, Kurt Van Dender, Herman Vollebergh, Nils-Henrik M. von der Fehr, Zhongmin Wang, Georg Zachmann

    • Hardcover $40.00 £32.00
  • International Currency Exposure

    International Currency Exposure

    Yin-Wong Cheung and Frank Westermann

    Issues in debates about foreign currency exposure—the denomination of liabilities or assets in foreign currency.

    The foreign currency denomination of contracts in international transactions can lead to international currency exposure at the country level with important economic and policy implications. When debts are denominated in foreign currency and revenues in domestic currency, exchange rate fluctuations can result in balance sheet effects for countries with either net asset or liability positions. Moreover, currency mismatch between assets and liabilities can be a cause for crises in developing and emerging economies. This book looks at the issues surrounding foreign currency exposure in today's increasingly integrated world economy.

    The contributors draw on cross-country as well as country-specific data. They consider international currency risk after the Swiss franc ended its one-sided peg with the euro, for example, and the foreign exchange positions of firms in Turkey and Russia. Other contributors take macroeconomic perspectives, examining the potential effects of exchange rate realignment, the pressure to appreciate on countries with current account surpluses, and the currency exposure in international trade. Finally, contributors consider the issue from finance and political economy perspectives, addressing the phenomenon of the forward premium puzzle and discussing geopolitical aspects ascending currencies.

    Contributors Fatih Altunok, Huseyin Aytug, Agustín S. Bénétrix, Jörg Breitung, Paul De Grauwe, Eiji Fujii, Peter Garber, Juann H. Hung, Signe Krogstrup, Philip R. Lane, Katja Mann, Arif Oduncu, Gunther Schnabl, Maria V. Sokolova, Cédric Tille

    • Hardcover $40.00 £32.00
  • Social Economics

    Social Economics

    Current and Emerging Avenues

    Joan Costa-Font and Mario Macis

    A rich collection of current research in the growing field of social economics, covering such issues as culture, gender, ethics, and philanthropic behavior.

    The growing field of social economics explores how individual behavior is affected by group-level influences, extending the approach of mainstream economics to include broader social motivations and incentives. This book offers a rich and rigorous selection of current work in the field, focusing on some of the most active research areas. Topics covered include culture, gender, ethics, and philanthropic behavior.

    Social economics grows out of dissatisfaction with a purely individualistic model of human behavior. This book shows how mainstream economics is expanding its domain beyond market and price mechanisms to recognize a role for cultural and social factors. Some chapters, in the tradition of Gary Becker, attempt to extend the economics paradigm to explain other social phenomena; others, following George Akerlof's approach, incorporate sociological and psychological assumptions to explain economic behavior. Loosely organized by theme—Social Preferences; Culture, Values, and Norms; and Networks and Social Interactions”—the chapters address a range of subjects, including gender differences in political decisions, “moral repugnance” as a constraint on markets, charitable giving by the super-rich, value diversity within a country, and the influence of children on their parents' social networks.

    Contributors Mireia Borrell-Porta, Sjoerd Beugelsdijk, Joan Costa-Font, Elwyn Davies, Julio Jorge Elias, Marcel Fafchamps, Luigi Guiso, Odelia Heizler, Ayal Kimhi, Mariko J. Klasing, Martin Ljunge, Mario Macis, Mark Ottoni-Wilhelm, Abigail Payne, Kelly Ragan, Jana Sadeh, Azusa Sato, Kimberley Scharf, Sarah Smith, Mirco Tonin, Michael Vlassopoulos, Evguenia Winschel, Philipp Zahn

    • Hardcover $35.00 £28.00
  • The Economics of Language Policy

    The Economics of Language Policy

    Michele Gazzola and Bengt-Arne Wickström

    Insights from the application of economic theories and research methods to the management of linguistic diversity in an era of globalization.

    In an era of globalization, issues of language diversity have economic and political implications. Transnational labor mobility, trade, social inclusion of migrants, democracy in multilingual countries, and companies' international competitiveness all have a linguistic dimension; yet economists in general do not include language as a variable in their research. This volume demonstrates that the application of rigorous economic theories and research methods to issues of language policy yields valuable insights.

    The contributors offer both theoretical and empirical analyses of such topics as the impact of language diversity on economic outcomes, the distributive effects of policy regarding official languages, the individual welfare consequences of bilingualism, and the link between language and national identity. Their research is based on data from countries including Canada, India, Kazakhstan, and Indonesia and from the regions of Central America, Europe, and Sub-Saharan Africa. Theoretical models are explained intuitively for the nonspecialist. The relationships among linguistic variables, inequality, and the economy are approached from different perspectives, including economics, sociolinguistics, and political science. For this reason, the book offers a substantive contribution to interdisciplinary work on languages in society and language policy, proposing a common framework for a shared research area.

    Contributors Alisher Aldashev, Katalin Buzási, Ramon Caminal, Alexander M. Danzer, Maxime Leblanc Desgagné, Peter H. Egger, Ainhoa Aparicio Fenoll, Michele Gazzola, Victor Ginsburgh, Gilles Grenier, François Grin, Zoe Kuehn, Andrea Lassmann, Stephen May, Serge Nadeau, Suzanne Romaine, Selma K. Sonntag, Stefan Sperlich, José-Ramón Uriarte, François Vaillancourt, Shlomo Weber, Bengt-Arne Wickström, Lauren Zentz

    • Hardcover $40.00 £32.00
  • The Economics and Political Economy of Energy Subsidies

    The Economics and Political Economy of Energy Subsidies

    Jon Strand

    The economic and political aspects of energy subsidies, viewed both theoretically and empirically, with a focus on fossil fuel subsidies in developing nations.

    Government subsidies to energy are widespread and represent a heavy burden on public budgets in many countries. Both producers and consumers may be subsidized; the most common subsidies are for motor fuel consumption and electricity production and consumption. The subsidies to consumers often prove particularly harmful because they result in increased energy consumption, increased carbon emissions, and distortionary effects on consumer behavior. This book fills a void in the literature by providing a first, broad and diverse, analysis of several aspects of the economic and political economy aspects of government energy subsidies. The contributors take both theoretical and empirical approaches, with most of the focus on subsidies to fuel and electricity in non-OECD countries.

    The chapters cover such topics as energy pricing, reelection incentives for politicians that may encourage excessive subsidies; political corruption and “bribing equilibria,” the the “resource curse” in developing countries when the gains from natural resource windfalls are largely wasted, the “entitlement” of energy subsidies in autocracies, and distributional issues when subsidies targeted to the poor are removed in high-income countries. One chapter discusses nonharmful subsidies: the potential economic effects of subsidizing the manufacturing and deployment of renewable energy.

    Contributors Carolyn Fischer, Mads Greaker, Mohammad Habibpour, Michelle Harding, Christina Kolerus, Christos Kotsogiannis, Jim Krane, Alber Touna Mama, Raffaele Miniaci, Marco Pani, Ian Parry, Carlo Perroni, Leonzio Rizzo, Knut Einar Rosendahl, Carlo Scarpa, Neda Seiban, Suphi Sen, Jon Strand, Paola Valbonesi, Herman Vollebergh

    • Hardcover $35.00 £28.00
  • Public Sector Economics and the Need for Reforms

    Public Sector Economics and the Need for Reforms

    Apostolis Philippopoulos

    Theoretically and empirically informed studies on the role and efficiency of the public sector, public wage and employment policy, privatization, tax policy, and fiscal sustainability.

    The public sector has grown substantially in the last fifty years. In the euro area, for example, total government expenditures have been around fifty percent of GDP since the early 2000s, resulting in a growing tax burden or high public debt or both. At the same time, government had intervened in all aspects of economic life, from the provision of public goods and services to product and labor market regulation. Research shows that the effect of government size on economic performance is positive in countries where the public sector is efficient but negative in countries where it is inefficient. In this book, experts from academe and central banking discuss reforms that would make the public sector more efficient and/or more equitable.

    After a rich review of the public sector reform policy agenda, with particular attention to the role of the public sector and how to improve the provision of public goods and services, the contributors offer theoretically and empirically informed perspectives on some specific policy topics. These include public wage and employment policy, the role of international institutions such as the World Bank in promoting public sector reforms, the optimal mix of tax policy, the measurement of public sector efficiency, and the study of fiscal sustainability. The contributors relate these topics to such deeper issues as individual incentives as well as to policy debates over privatization, and austerity.

    Contributors Konstantinos Angelopoulos, Stylianos Asimakopoulos, Danilo Ballanti, Roberto A. De Santis, Roberto Dispotico, George Economides, Pedro Gomes, Gabriella Legrenzi, James Malley, Costas Milas, Ilaria Petrarca, Apostolis Philippopoulos, Francesco Porcelli, Roberto Ricciuti, Lodewijk Smets, Peter Birch Sørensen, Petros Varthalitis, Francesco Vidoli

    • Hardcover $19.75 £15.99
  • The Economics of Infrastructure Provisioning

    The Economics of Infrastructure Provisioning

    The Changing Role of the State

    Arnold Picot, Massimo Florio, Nico Grove, and Johann Kranz

    The complexities of financing, installing, implementing, and regulating public infrastructures, including empirical research, analytical models, and theoretical insights.

    Infrastructures—tangible, intangible, and institutional public facilities, from bridges to health care—are a vital precondition for economic and societal wellbeing. There has been an increasing awareness that we cannot rely on market forces for infrastructure investment and maintenance. In this volume, experts from Europe, North and South America, and Asia examine the complexities of financing, installing, implementing, and regulating public infrastructures. Their contributions span a range of methodological approaches, including historical and empirical research, analytical models, theoretical analysis, and sector and regional case studies; they consider the economics of infrastructure provisioning by government, through private-public partnerships, and privatization arrangements.

    The book first treats general investment, growth, and policy issues, and then offers sector-specific analyses of transportation, energy, telecommunications, and water infrastructures. The chapters cover topics that include the evolution of historical infrastructure; the relationships between the state and private finance in funding and financing infrastructure; and the relevance of infrastructure for economic growth.

    Contributors Julio C. Aguirre, Laure Athias, Stephen J. Bailey, Sumedha Bajar, Biswa Nath Bhattacharyay, Federico Boffa, Daniel Danau, Sumit S. Deole, Balázs Egert, Massimo Florio, Stephan Fretz, Asmae El Gallaa, Marco Giorgino, Hugh Goldsmith, Nico Grove, Markus Hofmann, Lynne Kiesling, Johann Kranz, Antonio Nunez, Arnold Picot, Michael Pollitt, Olivier Crespi Reghizzi, Martina Santandrea, Stéphane Straub, Annalisa Vinella

    • Hardcover $19.75 £15.99
  • Political Economy and Instruments of Environmental Politics

    Political Economy and Instruments of Environmental Politics

    Friedrich Schneider, Andrea Kollmann, and Johannes Reichl

    Conceptual, empirical, and theoretical analyses of the effectiveness of market-based policy instruments in achieving environmental goals.

    Economists argue that such market-based policy instruments as environmental taxes and emission trading systems are the best way to target the negative effects of pollution. Yet there is no agreement about whether the use of these instruments is sufficient, whether they are deployed efficiently, and which factors influence their effectiveness. Nor is it clear if such policies have had any significant effect on the urgent matter of climate change mitigation. This volume offers conceptual, empirical, and theoretical analyses of the effectiveness of these policy instruments in achieving environmental goals. Taken together, the chapters not only identify shortcomings of existing policy making, but also point to ways in which more effective policy design can help solve one of the most pressing problems of our time.

    The contributors consider such topics as theoretical approaches to address the failure of the free market to protect the environment, the influence of people's trust in their government on their willingness to accept higher environmental taxes, political determinants of fossil fuel pricing, a game theoretic approach to understanding domestic political constraints on international environmental agreements, and intergenerational equity and carbon taxation.

    Contributors Elisa Belfiori, Frank J. Convery, Peter Egger, Denny Ellerman, Dominic Hauck, Philipp Hieronymi, Andrea Kollmann, Sonja Köke, Andreas Lange, Antony Millner, Francesco Nicolli, Sergey Nigai, Johannes Reichl, David Schüller, Jon Strand, Cees van Beers, Francesco Vona

    • Hardcover $19.75 £15.99
  • Emissions Trading as a Policy Instrument

    Emissions Trading as a Policy Instrument

    Evaluation and Prospects

    Marc Gronwald and Beat Hintermann

    Empirical and theoretical perspectives on the first two phases of the European Emissions Trading Scheme, the largest cap-and-trade market established so far.

    Emissions trading schemes figure prominently among policy instruments used to tackle the problem of climate change, and the European Union Emissions Trading Scheme (EU ETS), begun in 2005, is the largest cap-and-trade market so far established. In the EU ETS, firms regulated by the scheme are provided with emissions allowances (each a one-time right to emit one ton of greenhouse gases) and can sell their unused allowances to firms that have higher rates of emissions. In this volume, leading economists offer empirical and theoretical perspectives on the early phases of the EU ETS implementation.

    The contributors discuss the features of the EU ETS market; and regulatory uncertainty stemming from rule changes; the political economy context of the trading scheme, including allowance allocation and the influence of lobbying on abatement decisions; the coexistence of such overlapping instruments for climate policy as pricing and taxation; the relationship between spot and futures markets for allowances, and firms' responses to various features of the EU ETS, including fluctuating allowance prices, free allocation, and links to the Kyoto process. They show that, although the basic theory behind emissions permit markets is straightforward, design features, market structure, and interactions with other policy instruments can influence the efficiency of the scheme.

    Contributors Nathan Braun, A. Denny Ellerman, Timothy Fitzgerald, Beat Hintermann, Wolfgang Härdle, Peter Heindl, Philipp Hieronymi, Marc Gronwald, Frank Jotzo, Andreas Lange, Stephen Lecourt, Ralf Martin, A. J. Mulder, Mirabelle Muûls, Clement Pallière, Jason Pearcy, Oliver Sartor, David Schüller, Stefan Trück, Ulrich J. Wagner, Rafał Weron, Peter J. Wood

    • Hardcover $19.75 £15.99
  • The Knowledge Capital of Nations

    The Knowledge Capital of Nations

    Education and the Economics of Growth

    Eric A. Hanushek and Ludger Woessmann

    A rigorous, pathbreaking analysis demonstrating that a country's prosperity is directly related in the long run to the skills of its population.

    In this book Eric Hanushek and Ludger Woessmann make a simple, central claim, developed with rigorous theoretical and empirical support: knowledge is the key to a country's development. Of course, every country acknowledges the importance of developing human capital, but Hanushek and Woessmann argue that message has become distorted, with politicians and researchers concentrating not on valued skills but on proxies for them. The common focus is on school attainment, although time in school provides a very misleading picture of how skills enter into development. Hanushek and Woessmann contend that the cognitive skills of the population—which they term the “knowledge capital” of a nation—are essential to long-run prosperity.

    Hanushek and Woessmann subject their hypotheses about the relationship between cognitive skills (as consistently measured by international student assessments) and economic growth to a series of tests, including alternate specifications, different subsets of countries, and econometric analysis of causal interpretations. They find that their main results are remarkably robust, and equally applicable to developing and developed countries. They demonstrate, for example, that the “Latin American growth puzzle” and the “East Asian miracle” can be explained by these regions' knowledge capital. Turning to the policy implications of their argument, they call for an education system that develops effective accountability, promotes choice and competition, and provides direct rewards for good performance.

    • Hardcover $35.00 £28.00
  • Taxation and Regulation of the Financial Sector

    Taxation and Regulation of the Financial Sector

    Ruud de Mooij and Gaëtan Nicodème

    Analytical and empirical perspectives on the interplay of taxation and regulation in the financial sector.

    The global financial crisis has prompted economists to rethink fundamental questions on how governments should intervene in the financial sector. Many countries have already begun to reform the taxation and regulation of the financial sector—in the United States, for example, the Dodd–Frank Act became law in 2010; in Europe, different countries have introduced additional taxes on the sector and made substantial progress toward a banking union for the eurozone. Only recently, however, has a new field in economics emerged to study the interplay between public finance and banking. This book offers the latest thinking on the topic by American and European economists.

    The contributors first explore new conceptual ground, offering rigorous theoretical analyses that help us better understand how tax policy and regulation can contribute to avoiding another crisis or reducing its impact. Contributors then investigate the behavior of financial institutions in response to various forms of taxation and regulation, offering empirical evidence that is vital for policy design.

    Contributors Thiess Buettner, Jin Cao, Giuseppina Cannas, Gunther Capelle-Blancard, Jessica Cariboni, Brian Coulter, Ernesto Crivelli, Ruud de Mooij, Michael P. Devereux, Katharina Erbe, Ricardo Fenochietto, Marco Petracco Giudici, Timothy J. Goodspeed, Reint Gropp, Olena Havyrlchyk, Michael Keen, Lawrence L. Kreicher, Julia Lendvai, Ben Lockwood, Massimo Marchesi, Donato Masciandaro, Colin Mayer, Robert N. McCauley, Patrick McGuire, Gaëtan Nicodème, Masanori Orihara, Francesco Passarelli, Carola Pessino, Rafal Raciborski, John Vickers, Lukas Vogel, Stefano Zedda

    • Hardcover $19.75 £15.99
  • The Mobility of Students and the Highly Skilled

    The Mobility of Students and the Highly Skilled

    Implications for Education Financing and Economic Policy

    Marcel Gérard and Silke Uebelmesser

    Analyses of the interrelated mobility of students and the highly skilled that consider its implications for fiscal policy, higher education financing, and economic development.

    The mobility of students in developed countries has dramatically increased over the last fifty years. Students do not necessarily remain in their countries of origin for higher education and work; they might be born in one country, attend university in a second, and find employment in a third. In this book, contributors from Europe, North America, and Australia examine the interrelated mobility of university students and the highly skilled, and its consequences—in the country of origin, in the host country during studies, and in the work destination country—for fiscal policies, the financing of higher education, and economic growth.

    Taking a variety of approaches, including formal modeling and econometric analysis, the contributors first examine evidence of the interrelationship between the mobility of students and graduates, especially researchers; investigate free-riding problems associated with mobility, including the provision and funding of public higher education; and address the effects of education policy on human capital accumulation and economic development, offering recommendations for well-designed policies in the presence of migration of talents.

    Contributors Nicholas Barr, Elena Del Rey, Susana Elena-Pérez, Gabriel J. Felbermayr, Ana Fernandez-Zubieta, Luisa Gagliardi, Marcel Gérard, Alexander Haupt, Tim Krieger, Thomas Lange, Elisabetta Marinelli, Richard Murphy, María Racionero, Isabella Reczkowski, Silke Uebelmesser, Linda van Bouwel, Reinhilde Veugelers, David E. Wildasin

    • Hardcover $19.75 £15.99
  • Climate Policy and Nonrenewable Resources

    Climate Policy and Nonrenewable Resources

    The Green Paradox and Beyond

    Karen Pittel, Rick van der Ploeg, and Cees Withagen

    A detailed and rigorous analysis of the effect of climate policies on climate change that questions the empirical and theoretical support for the “green paradox.”

    Recent developments suggest that well-intended climate policies—including carbon taxes and subsidies for renewable energy—might not accomplish what policy makers intend. Hans-Werner Sinn has described a “green paradox,” arguing that these policies could hasten global warming by encouraging owners of fossil fuel reserves to increase their extraction rates for fear that their reserves will become worthless. In this volume, economists investigate the empirical and theoretical support for the green paradox.

    Offering detailed and rigorous analyses of the forces and assumptions driving Sinn's argument, the contributors consider whether rising carbon tax rates inevitably speed up climate change; the effects of the design of resource markets, the availability of clean substitutes, and the development of new technologies; and the empirical evidence (or lack thereof) for the green paradox result. They consider extraction costs; sustainability and innovation; timing, announcement effects, and time consistency in relation to policy measures; and empirical results for the green paradox phenomena under several alternative policy measures.

    Contributors Julien Daubanes, Corrado Di Maria, Carolyn Fischer, Florian Habermacher, Michael Hoel, Darko Jus, Gebhard Kirchgassner, Ian Lange, Pierre Lasserre, Volker Meier, Karen Pittel, Stephen Salant, Frank Stähler, Gerard van der Meijden, Frederick van der Ploeg, Edwin van der Werf, Ngo Van Long, Ralph A. Winter, Cees Withagen

    • Hardcover $19.75 £15.99
  • The Economics of Conflict

    The Economics of Conflict

    Theory and Empirical Evidence

    Karl Wärneryd

    Economists offer a rational-choice perspective on conflict, using approaches that range from the game theoretic to the experimental.

    Modern economics has largely ignored the issue of outright conflict as an alternative way of allocating goods, assuming instead the existence of well-defined property rights enforced by an undefined third party. And yet even in ostensibly peaceful market transactions, conflict exists as an outside option, sometimes constraining the outcomes reached through voluntary agreement. In this volume, economists offer a crucial rational-choice perspective on conflict, using methodological approaches that range from the game theoretic to the experimental.

    Several chapters use the recently developed contest success function to model conflict, examining such topics as alliance formation, regional conflicts under fiscal federalism, coups d'etat in developing countries, and the correlation between conflict and economic growth in Bolivia. Other chapters consider subjects that include the link between occupational choices and antigovernment activity in Afghanistan, social unrest and the IMF's Structural Adjustment Program, and the effect of Tajikistan's civil war on ex-combatants' capacity for trust and cooperation.

    Taken together, these contributions show that economics needs a theory of conflict to understand both outright conflict and transactions in the shadow of conflict. But beyond this, they show that the study of conflict also needs the rigorous, methodology-based perspectives of economics.

    Contributors Vincenzo Bove, Raul Caruso, Alessandra Cassar, Jacopo Costa, Maria Cubel, Leandro Elia, Jose Luis Evia, Davide Fiaschi, Pauline Grosjean, Ruixue Jia, Kai A. Konrad, Roberto Laserna, Pinghan Liang, Roberto Ricciuti, Stergios Skaperdas, Caleb Stroup, Karl Wärneryd, Sam Whitt, Ben Zissimos

    • Hardcover $45.00 £38.00
  • Firms in the International Economy

    Firms in the International Economy

    Firm Heterogeneity Meets International Business

    Sjoerd Beugelsdijk, Steven Brakman, Hans van Ees, and Harry Garretsen

    Essays by leading scholars suggest that insights from international business could enrich firm heterogeneity research in international economics.

    Despite their common roots, international economics (IE) and international business (IB) have developed into two distinct fields of study. Economists have directed their efforts at formalizing the workings of international trade and investment at the macroeconomic level; business scholars have relied more on data-driven conceptual narratives than mathematical tools. But the recent focus of IE literature on firm heterogeneity suggests that IE would benefit from IB analyses of the behavior and organization of the internationalizing firm. The contributions to this volume investigate ways that insights from IB can enrich IE research in firm heterogeneity.

    The contributors discuss firm-specific advantages in international trade and investment, considering the firm as the unit of analysis and managerial inputs as a variable in market entry decisions; analyze interactions between a firm and its external environment, including local corporate philanthropy and institutional settings; examine the boundaries of the firm and organizational choices such as the make-or-buy decision; and investigate technology transfer and innovation offshoring, discussing the role of subsidiaries, inventor employment, and other related topics.

    Although IE and IB look at international firms from different perspectives, these contributions make it clear that there is a potential for a productive exchange of insights and information between the two disciplines.

    Contributors Laura Abramovsky, Carlo Altomonte, Sjoerd Beugelsdijk, Bruce Blonigen, Pamela Bombarda, Steven Brakman, Julia Darby, Rodolphe Desbordes, Filippo Di Mauro, María García-Vega, Harry Garretsen, Elena Huergo, Florian Mayneris, Quyen T. K. Nguyen, Verena Nowak, Cheyney O'Fallon, Gianmarco Ottaviano, Michael Pflüger, Filomena Pietrovito, Sandra Poncet, Alberto Franco Pozzolo, Alan M. Rugman, Armando Rungi, Stephan Russek, Davide Sala, Luca Salvatici, Christian Schwarz, Roger Smeets, Jens Suedekum, Hans van Ees, Vincent Vicard, Ian Wooton, Erdal Yalcin

    • Hardcover $19.75 £15.99
  • Global Interdependence, Decoupling, and Recoupling

    Global Interdependence, Decoupling, and Recoupling

    Yin-Wong Cheung and Frank Westermann

    Investigations of the propagation and influence of global shocks among the economies of developed and developing countries.

    One lens through which to view global economic interdependence and the spillover of shocks is that of decoupling (and then recoupling). Decoupling between developed and developing countries can be seen in the strong economic performance of China and India relative to that of the United States and Europe in the early 2000s. Recoupling then took place as developing countries sank along with the developed world during the deepening financial crisis of 2008. This volume examines patterns of global economic interdependence and the propagation of shocks in an increasingly integrated world economy.

    The contributors discuss such topics as the transmission of exogenous shocks; causes of business cycle synchronicity; the differences between global and regional shocks; the South-South trade relationship and its effect on decoupling; vertical specialization and Mexico's manufacturing exports; growth prospects in China, the United States, and Europe after the financial crisis; and the evolving role of the U.S. dollar in international monetary architecture.

    Contributors Helge Berger, Rossella Calvi, Yin-Wong Cheung, Gianluca Cubadda, Justino De La Cruz, Filippo di Mauro, Michael Dooley, Eiji Fujii, Linda S. Goldberg, Barbara Guardabascio, Alain Hecq, Hideaki Hirata, Robert B. Koopman, M. Ayhan Kose, Marco J. Lombardi, Steven Lugauer, Nelson C. Mark, Volker Nitsch, Christopher Otrok, Tuomas Antero Peltonen, Gabor Pula, Pierre L. Siklos, Zhi Wang, Shang-Jin Wei, Frank Westermann

    • Hardcover $7.75 £5.99
  • Lessons from the Economics of Crime

    Lessons from the Economics of Crime

    What Reduces Offending?

    Philip J. Cook, Stephen Machin, Olivier Marie, and Giovanni Mastrobuoni

    Research from the United States, Europe, and South America demonstrates the usefulness of the tools of economic analysis for the study of crime.

    Economists who bring the tools of economic analysis to bear on the study of crime and crime prevention contribute to current debates a normative framework and sophisticated quantitative methods for evaluating policy, the idea of criminal behavior as rational choice, and the connection of individual choices to aggregate outcomes. The contributors to this volume draw on all three of these approaches in their investigations and discuss the policy implications of their findings.

    Reporting on research in the United States, Europe, and South America, the chapters discuss such topics as a cost-benefit analysis of additional police hiring, the testing of innovative policy interventions through field experiments, imprisonment and recidivism rates, incentives and disincentives for sports hooliganism (“hooliganomics”), data showing the influence of organized crime on the quality of local politicians, and the (scant) empirical evidence for the effect of immigration on crime. These contributions demonstrate the eclectic approach of economists studying crime as well as their increasing respect for the contributions of other social scientists in this area.

    Contributors Brian Bell, Paolo Buonanno, Philip J. Cook, John J. Donohue III, Jeffrey R. Kling, Jens Ludwig, Stephen Machin, Olivier Marie, Giovanni Mastrobuoni, Sendhil Mullainathan, Aurélie Ouss, Emily Greene Owens, Stefan Pichler, Paolo Pinotti, Mikael Priks, Daniel Römer, Rodrigo R. Soares, Igor Viveiros

    • Hardcover $7.75 £5.99
  • Central Bank Communication, Decision Making, and Governance

    Central Bank Communication, Decision Making, and Governance

    Issues, Challenges, and Case Studies

    Pierre L. Siklos and Jan-Egbert Sturm

    Experts analyze the recent emphasis on central communication as an additional policy and accountability device.

    In recent years central bankers have placed new emphasis on communication with financial markets and the general public. They have done this not only through the traditional channel of monetary policy pronouncements but also by increasing the quantity of information they make public. Yet as central banks strive to provide more and clearer information about the outlook for the economy, they must balance their capacity to steer economic expectations with their natural caution about committing to future monetary policy paths. This volume offers a variety of perspectives on the economic implications of increased central bank communication.

    Contributors offer theoretical analyses of the effect of central bank communication on the general macroeconomic environment; consider a variety of novel empirical approaches to the issue; and analyze communication, decision making, and governance practices of the Greenspan-era U.S. Federal Reserve, the fledgling European Central Bank, and a variety of smaller central banks, including those of the Czech Republic, Sweden, England, and New Zealand.

    Contributors Helge Berger, Michelle Bligh, Marianna Blix-Grimaldi, Aleš Bulíř, Robert Chirinko, Martin Čihák, Christopher Curran, Paul De Grauwe, Jakob de Haan, Michael Ehrmann, Marcel Fratzscher, Petra Geraats, Gregory Hess, Roman Horváth, David-Jan Jansen, Özer Karagedikli, Michael Lamla, David Mayes, Alberto Montagnoli, Pierre L. Siklos, Kateřina Šmídková, Jan-Egbert Sturm, Jan Zápal

    • Hardcover $19.75 £15.99
  • The Evolving Role of China in the Global Economy

    The Evolving Role of China in the Global Economy

    Yin-Wong Cheung and Jakob de Haan

    Experts analyze four factors in China's economic growth: exchange rate policy, savings and investments, monetary policy, and foreign direct investments.

    China is now the world's second largest economy and may soon overtake the United States as the world's largest. Despite its adoption of some free-market principles, China considers itself a “socialist-market economy,” suggesting that the government still plays a major role in the country's economic development. This book offers a systematic analysis of four factors in China's rapid economic growth: exchange rate policy, savings and investment, monetary policy and capital controls, and foreign direct investment (FDI).

    Contributors offer fresh perspectives on the undervaluation of the renminbi, the dollar peg, and China's macroeconomic relationships with the rest of the world. They review factors shaping China's saving dynamics and analyze the growth of the private sector despite limited access to external finance. They examine the monetary policy independence of the People's Bank of China, offshore markets for China's currency, and the effectiveness of China's capital controls. Finally, they consider Chinese FDI in terms of China's growing demand for energy and raw materials, exploring the factors that drive China's FDI in the conventional oil-producing countries and in Africa.

    • Hardcover $19.75 £15.99
  • Illicit Trade and the Global Economy

    Illicit Trade and the Global Economy

    Cláudia Costa Storti and Paul De Grauwe

    Economists explore the relationship between expanding international trade and the parallel growth in illicit trade, including illegal drugs, smuggling, and organized crime.

    As international trade has expanded dramatically in the postwar period—an expansion accelerated by the opening of China, Russia, India, and Eastern Europe—illicit international trade has grown in tandem with it. This volume uses the economist's toolkit to examine the economic, political, and social problems resulting from such illicit activities as illegal drug trade, smuggling, and organized crime.

    The contributors consider several aspects of the illegal drug market, including the sometimes puzzling relationships among purity, price, and risk; the effect of globalization on the heroin and cocaine markets, examined both through mathematical models and with empirical data from the U.K; the spread of khat, a psychoactive drug imported legally to the U.K. as a vegetable; and the economic effect of the “war on drugs” on producer and consumer countries. Other chapters examine the hidden financial flows of organized crime, patterns of smuggling in international trade, Iran's illicit trading activity, and the impact of mafia-like crime on foreign direct investment in Italy.

    • Hardcover $19.75 £15.99
  • The Continuing Evolution of Europe

    The Continuing Evolution of Europe

    Thiess Buettner and Wolfgang Ochel

    Economists address key challenges facing the EU, including financial instability, welfare state reform, inadequate institutional framework, and global economic integration.

    The European Union began with efforts in the Cold War era to foster economic integration among a few Western European countries. Today's EU constitutes an upper tier of government that affects almost every level of policymaking in each of its twenty-seven member states. The recent financial and economic crises have tested this still-evolving institutional framework, and this book surveys key economic challenges faced by the EU.

    Prominent European economists examine such topics as the stability of the financial markets and possible policy options to reduce future vulnerability to crises, including Glass-Steagull-style narrow banking; the effect of emerging economies such as China and India on Europe's economic position; the protection of national interests in industrial policy; reforming and preserving the welfare state in the face of unemployment, population aging, and worker mobility within the EU; and improving the EU's institutional framework by reassigning responsibilities among supranational, national, and local governments.

    Among the conclusions that emerge from these analyses are the necessity for banking regulation as well as budgetary discipline; the need to consider global as well as European integration; and the idea that an environment that fosters internal competition will increase Europe's competitiveness internationally.

    • Hardcover $7.75 £5.99
    • Paperback $25.00 £20.00
  • Industrial Policy for National Champions

    Industrial Policy for National Champions

    Oliver Falck, Christian Gollier, and Ludger Woessmann

    Prominent economists present the pros and cons of government's subsidizing or protecting firms that are “national champions.”

    Governments around the world are deeply divided about the proper role of industrial policy, with some politicians arguing for hands-off governance and others supporting government intervention to promote “national champions”—firms that receive government support for both political and economic reasons. In this volume, prominent economists present the pros and cons of government support for national champions. The contributors use the rigor of economic models in their studies, offering a quantitative perspective that complements and extends existing qualitative studies, and focus on issues emerging from the European Union's substantial degree of market integration.

    Many arguments in favor of champions-promoting policies are made in a dynamic context, so the book first presents chapters that take a dynamic economy view, then presents chapters that examine the political economy of the decision process, and finally, offers “classical” static equilibrium arguments. The richness of the different models provides a deeper understanding of industrial policy than could any model alone. What becomes clear from these different perspectives nevertheless is that it is difficult to make a general case in favor of policies promoting national champions on purely economic grounds and that these policies are best understood in political terms.

    • Hardcover $19.75 £15.99
  • Perspectives on the Performance of the Continental Economies

    Perspectives on the Performance of the Continental Economies

    Edmund S. Phelps and Hans-Werner Sinn

    Leading economists consider the apparent underperformance of the European economy, testing various explanations against data.

    Economists disagree on what ails the economies of continental western Europe, which are widely perceived to be underperforming in terms of productivity and other metrics. Is it some deficiency in their economic system—in economic institutions or cultural attitudes? Is it some effect of their welfare systems of social insurance and assistance? Or are these systems healthy enough but weighed down by adverse market conditions?

    In this volume, leading economists test the various explanations for Europe's economic underperformance against real-world data. The chapters, written from widely varying perspectives, demonstrate the shortcomings and strengths of some methods of economics as much as they do the shortcomings and strengths of some economies of western continental Europe. Some contributors address only income per head or per worker; others look at efficiency and distortions of national choices such as that between labor and leisure; still others look at job satisfaction, fulfillment, and rates of indigenous innovation. Many offer policy recommendations, which range from developing institutions that promote entrepreneurship to using early education to increase human capital.

    • Hardcover $9.75 £7.99
  • Fertility and Public Policy

    Fertility and Public Policy

    How to Reverse the Trend of Declining Birth Rates

    Noriyuki Takayama and Martin Werding

    Experts discuss the appropriateness and effectiveness using public policy to influence fertility decisions.

    In 2050, world population growth is predicted to come almost to a halt. Shortly thereafter it may well start to shrink. A major reason behind this shift is the fertility decline that has taken place in many developed countries. In this book, experts discuss the appropriateness and effectiveness of using public policy to influence fertility decisions. Contributors discuss the general feasibility of public interventions in the area of fertility, analyze fertility patterns and policy design in such countries as Japan, South Korea, China, Sweden, and France, and offer theoretical analyses of parental fertility choices that provide an overview of a broad array of child-related policy instruments in a number of OECD and EU countries.

    The chapters show that it is difficult to gauge the effectiveness of such policy interventions as child-care subsidies, support for women's labor-force participation, and tax incentives. Data are often incomplete, causal relations unproved, and the role of social norms and culture difficult to account for. Investigating reasons for the decline in fertility more closely will require further study. This volume offers the latest work on this increasingly important subject.

    • Hardcover $8.75 £6.99
  • Reforming Rules and Regulations

    Reforming Rules and Regulations

    Laws, Institutions, and Implementation

    Vivek Ghosal

    Experts examine how regulatory and institutional environments affect the functioning of markets and propose reforms.

    In recent years governments have paid increasing attention to weighing the socioeconomic benefits of regulations against their costs. Rules and regulations governing economic activity are typically formulated with a view to their benefits. Their effects on the costs and inefficiencies, in particular the possible chilling effects on competition and innovation, have received limited attention. In this collection, experts from Europe, the United States, and Asia examine a range of issues related to the effect of rules and regulations on competition, and explore the role of key institutions that affect market outcomes. Their contributions argue for using quantitative methods to guide policy and reform rules and regulation, and many of the essays offer methodologies for assessment and recommendations for policy alternatives.Topics covered include the effectiveness of R&D tax incentives in OECD countries; the adverse effect of EU climate policy on competitiveness; telecommunication regulation in the developing countries of India, China, and Sri Lanka; the role of banks in fostering small and medium enterprises in Argentina and Chile; the evolution of the U.S. Federal Home Loan Bank (FHLB) System; and developing quantitative screening tools to assess which sectors in the economy might benefit most from regulatory reforms.

    Contributors Victoria Alexeeva-Talebi, Niels Anger, Dallas Burtraw, Martin Cave, Matthew Corkery, Adriaan Dierx, Sean Ennis, W. Scott Frame, Vivek Ghosal, Ivan Hascic, Ivan Hascic, Fabienne Ilzkovitz, Nick Johnstone, Boris Lokshin, Andreas Löschel, María Soledad Martínez Pería, Pradeep S. Mehta, Udai S. Mehta, Malwina Mejer, Siddhartha Mitra, Pierre Mohnen, Karen Palmer, Anthony Paul, Bruno van Pottelsberghe de la Potterie, Sergio L. Schmukler, Augusto de la Torre, Lawrence J. White

    • Hardcover $8.75 £6.99
  • Institutional Microeconomics of Development

    Institutional Microeconomics of Development

    Timothy Besley and Rajshri Jayaraman

    Leading scholars examine political, legal, social, and market institutions through a microeconomic lens.

    The narrative of development economics is now infused with discussions of institutions. Economists debate whether institutions—or other factors altogether (geography, culture, or religion)—are central to development. In this volume, leading scholars in development economics view institutions from a microeconomic perspective, offering both theoretical overviews and empirical analyses spanning three continents. After substantial introductory chapters by Pranab Bardhan and Marcel Fafchamps, two scholars who have published important work on this topic, each of the remaining chapters examines a particular set of institutions in a unique setting. These chapters treat the effects of Angola's violent conflict on that country's development; institutional accountability in Uganda; the effect of Indonesia's ethnic diversity on the distribution of public goods; the impact of trade liberalization on India's investment climate; extended family networks in Mexico; and a microeconomic perspective on land rights in Ethiopia. The chapters demonstrate the remarkable heterogeneity of institutions—policy change is mediated through local market institutions, government institutions, and families—as well as the empirical and methodological ingenuity of current research into this crucial topic.

    Contributors Manuela Angelucci, Oriana Bandiera, Pranab Bardhan, Timothy Besley, Martina Björkman, Robin Burgess, Giacomo De Giorgi, Stefan Dercon, Marcel Fafchamps, Rajshri Jayaraman, Pramila Krishnan, Eliana La Ferrara, Gilat Levy, Marcos A. Rangel, Imram Rasul, Ritva Reinikka, Jakob Svensson

    • Hardcover $19.75 £15.99
  • The Indirect Side of Direct Investment

    The Indirect Side of Direct Investment

    Multinational Company Finance and Taxation

    Jack M. Mintz and Alfons J. Weichenrieder

    An examination of indirect finance structures used by multinational corporations to reduce their worldwide tax payments.

    The recent increase in cross-border flows of foreign direct investment has sharpened the research focus on multinational taxation. In this book, taxation experts Jack Mintz and Alfons Weichenrieder examine how multinational corporations use indirect financing structures—organizing themselves into groups with several tiers of ownership—to reduce worldwide taxes. They spell out in detail how different tax policies affect corporations' choice of financing structures, discussing the issues in both theoretical and empirical terms. Drawing on a unique data set (MiDi) on German multinationals provided by the Deutsche Bundesbank in Frankfurt, Mintz and Weichenrieder confirm the prevalence of indirect financing structures for both outbound and inbound German investment. They find evidence of “treaty shopping” to avoid withholding taxes (using a third country with more favorable tax rates as a conduit through which to route investments) and of “debt shifting.” Mintz and Weichenrieder argue that increasing our knowledge of the tax reasons behind conduit investment will lead to a better understanding of how tax policy can affect macroeconomic flows of capital in the global economy. They review the trade-offs that governments face and discuss policy options, considering not only possible changes to corporate income tax policy but also the potential influence of international cooperation on countries' domestic tax policy.

    • Hardcover $8.75 £6.99
  • Dimensions of Competitiveness

    Dimensions of Competitiveness

    Paul De Grauwe

    Leading economists analyze the multiple factors that drive competitiveness among nations in world markets.

    Competitiveness among nations is often approached as if it were a sports competition: some countries win medals, others lose out. This view of countries fighting it out in the economic arena is especially popular in business circles and among politicians. Economists, however, take a very different approach to international economic relations, arguing that international trade leads not to winners and losers but to win-win situations in which all countries profit. In this volume, leading economists take on the sometimes-derided concept of competitiveness, demonstrating the value of systematic analysis in an area too often dominated by special interest groups who use (and abuse) the concept to advance hidden agendas. The chapters range from broad theoretical views to case studies, examining the multiple factors that drive competitiveness. Contributors consider the conceptual framework underlying the World Economic Forum's approach to competitiveness; differences in per capita GDP between the United States and the European Union; an integrated approach to measuring competitiveness and comparative advantage; divergent trends in price and cost competitiveness in the euro area; methodological issues in constructing competitiveness indicators; taxation and international competitiveness; and a case study of Mexico's competitiveness in world markets in comparison to China's.

    Contributors Harry P. Bowen, Michele Ca' Zorzi, Jean-Philippe Cotis, Romain Duval, Christoph Fischer, Michael S. Knoll, Inmaculada Martinez-Zarzoso, Wim Moesen, Felicitas Nowak-Lehmann, Xavier Sala-i-Martin, Bernd Schnatz, Alain de Serres, Eckhard Siggel, Sebastian Vollmer

    • Hardcover $8.75 £6.99
  • Guns and Butter

    Guns and Butter

    The Economic Causes and Consequences of Conflict

    Gregory D. Hess

    Insights into war and domestic insecurity, terrorism, and the costs of war and peace from new research that takes the political economy perspective on conflict.

    Guns and Butter examines the causes and consequences of war from a political economy perspective, taking as its premise that a consideration of the incentives and constraints faced by individuals and groups is paramount in understanding conflict decision making. The chapter authors—leading economists and political scientists—believe that this perspective offers deeper insights into war and peace choices than the standard state-centric approach. Their contributions offer both theoretical and empirical support for the political economy perspective on conflict. Several broad themes cut across the chapters: war as an equilibrium phenomenon rather than an exogenous process; the interaction of politics, economics, and institutions and its effect on the frequency and severity of conflicts; the cost of fighting; and the often innovative character of conflict. Topics addressed include theoretical aspects of the ways in which domestic politics affects the decision to go to war; globalization and its effect on the net supply of terrorism; open markets and the likelihood of war and domestic insecurity; the costs of going to war in Iraq as compared to the costs of containment; the economic effects of the Rwandan genocide at a household level; and the evolving industrial organization of terrorist groups.

    Contributors Brock Blomberg, Bruce Bueno de Mesquita, Ethan Bueno de Mesquita, Steven J. Davis, Michelle R. Garfinkel Edward Glaeser, Gregory D. Hess, Kai Konrad, Kevin M. Murphy, Peter Rosendorff, Stephen Sheppard, Stergios Skaperdas, Constantinos Syropoulos, Robert H. Topel, Marijke Verpoorten

    • Hardcover $8.75 £6.99
    • Paperback $25.00 £20.00
  • Economic Prosperity Recaptured

    Economic Prosperity Recaptured

    The Finnish Path from Crisis to Rapid Growth

    Seppo Honkapohja, Erkki A. Koskela, Willi Leibfritz, and Roope Uusitalo

    Many countries have experienced major economic changes since the mid-1980s as a result of the deregulation and liberalization of national financial systems—two key aspects of globalization—with some experiencing boom and bust in rapid succession. The small Northern European country of Finland has been hailed as a success story for achieving renewed economic growth and prosperity after a financial crisis and deep depression in the early 1990s.

    Economic Prosperity Recaptured offers a detailed analysis of the rapid swings in Finland's recent economic development, from initial overheating in the late 1980s through deep crisis in the early 1990s to recovery and growth since the mid-1990s.

    Finland's complex road to recovery offers excellent examples of both unsuccessful and successful policy responses to changing circumstances. The authors examine the three relatively distinct periods of Finland's recent experience, analyzing the adequacy of the macroeconomic policy response in each case. They assess the real economic effects of financial constraints and look for evidence of the "credit channel" of the monetary system. Finland's rapid economic growth since the mid-1990s is largely the result of its structural transformation into a high-tech economy; Nokia is the most famous example of this information and communication technology success. Elaborating on Finland's ICT revolution, the authors demonstrate that well-designed economic policies contributed to Finland's economic turnaround.

    CESifo Book series

    • Hardcover $8.75 £6.99
    • Paperback $30.00 £25.00
  • Poverty, Inequality, and Policy in Latin America

    Poverty, Inequality, and Policy in Latin America

    Stephan Klasen and Felicitas Nowak-Lehmann

    Experts examine the dynamics of poverty and inequality in Latin America and policies to address them using new tools and data.

    High inequality in incomes and assets and persistent poverty continue to plague Latin America and remain a central economic policy challenge for Latin American policymakers. At the same time, dramatically improved methods and data allow researchers to analyze these problems and how they are affected by economic policy. In this book, experts on Latin American economic affairs use these new approaches to examine the dynamics of poverty and inequality in Latin America and the ability of policy to address them. Contributors first analyze the historical evolution of inequality in Latin America, examining such topics as the origins of inequality in colonial land distribution, the impact of educational opportunities on earnings inequality in Brazil, and racial discrimination in Brazil's labor market. Contributors then use sophisticated panel data techniques to analyze the regional dynamics of poverty and inequality in Peru and Brazil, considering whether there are spatial poverty traps and, if so, what determines such traps. Finally, contributors use innovative impact evaluation and modeling techniques to examine specific policy issues: devaluation and dollarization in Bolivia, the Oportunidades conditional cash transfer program in rural Mexico, and the distributional effect of Brazil's tax-benefit system.

    Contributors Rozane Bezerra de Siquiera, Jere R. Behrman, Denis Cogneau, Philippe De Vreyer, Ewout Frankema, Jérémie Gignoux, Javier Herrera, Herwig Immervoll, Stephan Klasen, Phillippe G. Leite, Horacio Levy, Sandrine Mesplé-Somps, José Ricardo Nogueira, Felicitas Nowak-Lehmann, Cathal O'Donoghue, Susan W. Parker, Rainer Schweickert, Gilles Spielvogel, Rainer Thiele, Petra E. Todd, Manfred Wiebelt

    • Hardcover $8.75 £6.99
  • The Design of Climate Policy

    The Design of Climate Policy

    Roger Guesnerie and Henry Tulkens

    Leading economists offer theoretical, quantitative, and policy perspectives on climate policy.

    Debates over post-Kyoto Protocol climate change policy often take note of two issues: the feasibility and desirability of international cooperation on climate change policies, given the failure of the United States to ratify Kyoto, and the very limited involvement of developing countries; and the optimal timing of climate policies. These essays by leading international economists in this book offer insights on both these concerns.

    The book first considers the appropriate institutions for effective international cooperation on climate change, proposing an alternative to the Kyoto arrangement and a theoretical framework for such a scheme. The discussions then turn to the stability of international environmental agreements, emphasizing the logic of coalition forming (including the applicability of game-theoretical analysis). Finally, contributors address both practical and quantitative aspects of policy design, offering theoretical analyses of such specific policy issues as intertemporal aspects of carbon trade and the optimal implementation of a sequestration policy and then using formal mathematical models to examine policies related to the rate of climate change, international trade and carbon leakage, and the shortcomings of the standard Global Warming Potential index.

    Contributors Philippe Ambrosi, David F. Bradford, Barbara Buchner, Carlo Carraro, Parkash Chander, Stéphane De Cara, Damien Demailly, A. Denny Ellerman, Johan Eyckmans, Michael Finus, Elodie Galko, Roger Guesnerie, Jean-Charles Hourcade, Pierre-Alain Jayet, Gilles Lafforgue, Bernard Magné, Sandrine Mathy, Michel Moreaux, Sushama Murty, William A. Pizer, Philippe Quirion, Katrin Rehdanz, P. R. Shukla, Jaemin Song, Ian Sue Wing, Sylvie Thoron, Richard S. J. Tol, Henry Tulkens

    • Hardcover $8.75 £6.99
    • Paperback $35.00 £28.00
  • Sustainability of Public Debt

    Sustainability of Public Debt

    Reinhard Neck and Jan-Egbert Sturm

    Theoretical and empirical perspectives on how fiscal policies in Europe and the United States can avoid government bankruptcy.

    In recent decades, governments have built up substantial public debt, which is often accompanied by a growing public sector and fiscal policies that neglect long-term considerations. The contributors to this CESifo volume consider whether the development of public debt in the United States and six EU countries is sustainable—that is, whether fiscal policies in these countries can be continued without creating the potential for government bankruptcy. The sustainability of public debt presents a challenge not only to public policy design but also to economic theory. This collection is the first book-length analysis of the theoretical foundations of public debt sustainability concepts and their application to the empirical study of actual budgetary policies. Conditions for public debt sustainability are derived and applied to various institutional environments. Country studies cover the United States, Italy, the Netherlands, Austria, Denmark, the United Kingdom, and Switzerland, with special emphasis in the EU chapters on the fiscal criteria for entrance into the European Monetary Union and the Stability and Growth Pact. The contributors find that in most countries, fiscal policy turns out to be sustainable in the long run and that all countries (with the possible exception of Italy) were able to return to a sustainable path after a period of unsustainability.

    Contributors Torben M. Andersen, Roel M. W. J. Beetsma, Henning Bohn, Marco Buti, Sylvester Eijffinger, Lars P. Feld, Daniele Franco, Emma Galli, Olaf de Groot, Gottfried Haber, Jakob de Haan, Andrew Hughes Hallett, Svend E. Hougaard Jensen, Gebhard Kirchgässner, Reinhard Neck, Fabio Padovano, Lars Haagen Pedersen, Jan-Egbert Sturm, Koen Vermeylen

    • Hardcover $8.75 £6.99
  • Currency Boards in Retrospect and Prospect

    Currency Boards in Retrospect and Prospect

    Holger C. Wolf, Atish R. Ghosh, Helge Berger, and Anne-Marie Gulde

    An authoritative analysis that employs economic theory, cross-country empirical comparison, and case studies to analyze the effect of currency boards on inflation, output growth and macroeconomic performance.

    Currency boards, more so than other exchange rate regimes, have come in and out of fashion. Defined by a fixed exchange rate with full convertibility, central bank liabilities backed with foreign exchange reserves, and a high cost of exiting the regime, currency boards were common in colonial times—until most were cast off as countries gained independence after World War II. In the 1990s, currency boards enjoyed a revival as the cornerstone of various macroeconomic stabilization programs—including many in central and eastern European transition economies—only to fall into disfavor again with the collapse of the Argentine regime in 2002. The authors of Currency Boards in Retrospect and Prospect take a balanced look at the effects of currency board regimes on inflation, output growth, and macroeconomic performance more generally. Drawing on historical experience, economic theory, cross-country empirical analysis, and case studies of currency boards in Argentina, Estonia, Lithuania, Bulgaria, and Bosnia and Herzegovina, the authors conclude that currency boards deliver significant reductions in inflation compared to other regimes and do not seem to result in slower growth or a markedly higher vulnerability to crisis.

    • Hardcover $9.75 £7.99
  • Foreign Direct Investment and the Multinational Enterprise

    Foreign Direct Investment and the Multinational Enterprise

    Steven Brakman and Harry Garretsen

    Top economists examine one of the key forces in globalization from a wide range of theoretical and empirical perspectives.

    The multinational firm and its main vehicle, foreign direct investment, are key forces in economic globalization. Their importance to the world economy can be seen in the fact that since 1990 foreign direct investment has grown more rapidly than the world GDP and world trade. Despite this, the causes and consequences of multinational firm activity are little understood and until recently relatively unexamined in the theoretical literature. This CESifo volume fills this gap, examining the multinational enterprise (MNE) and foreign direct investment (FDI) from both theoretical and empirical perspectives. In the theoretical chapters, leading scholars take a wide range of modern analytical approaches—from new growth and trade theories to new economic geography, industrial organization, and game theory. Taking current theoretical work on MNE and FDI as a starting point and aiming to extend the existing theoretical framework, the contributors consider such topics as investment liberalization and firm location, tax competition, and welfare consequences of FDI and outsourcing. The empirical chapters test several of the key hypotheses of recent theoretical work on MNE and FDI, examining topics that include productivity effects on Italian MNEs, the different effects of outsourcing in Austria and Poland, location decisions of MNEs in the European Union, and other topics.

    Contributors Oscar Amerighi, Bruce A. Blonigen, Steven Brakman, Davide Castellani, Ronald B. Davies, Alan V. Deardorff, Fabrice Defever, Harry Garretsen, Anders N. Hoffman, Andzelika Lorentowicz, James R. Markusen, Charles van Marrewijk, Dalia Marin, James R. Marukusen, Alireza Naghavi, Helen T. Naughton, Giorgio Barba Navaretti, J. Peter Neary, Gianmarco Ottaviano, Alexander Raubold, Glen R. Waddell

    • Hardcover $8.75 £6.99
  • Pension Strategies in Europe and the United States

    Pension Strategies in Europe and the United States

    Robert Fenge, Georges de Menil, and Pierre Pestieau

    Leading economists analyze topical issues in pension policy, including structural reform of pay-as-you-go systems, the political sustainability of pension reforms, and the need for private, funded systems.

    Demographic realities will soon force developed countries to find ways to pay for longer retirements for more people. In Pension Strategies in Europe and the United States, leading economists analyze topical issues in pension policy, with a focus on raising the retirement age, increasing retirement savings, and the political sustainability of reforms that will accomplish these goals. After a substantive and wide-ranging introduction by the editors that weaves together the demographic and economic strands of the story, the chapters present cutting-edge research, offering both theoretical and empirical analyses. Contributors examine such topics as the reform of key structural features of existing pay-as-you-go (PAYG) pension systems, analyzing how benefits should vary with the age of retirement, labor supply elasticity after France's 1993 pension reform, and fiscal response to a demographic shock; the feasibility of PAYG reforms in the United States and the competition among state pension systems that results from labor mobility in Europe; and private, funded systems (increasingly perceived as necessary adjuncts to PAYG systems) in the UK, the US, and the Netherlands, and in terms of individual portfolio management. The editors conclude the volume with a study of recent German and UK reforms and their effects on personal savings.

    Contributors Theodore C. Bergstrom, A. Lans Bovenberg, Antoine Bozio, Woojen Chung, Juan C. Conesa, Gabrielle Demange, Richard Disney, Carl Emmerson, Robert Fenge, Luisa Fuster, Carlos Garriga, Christian Gollier, John L. Hartman, Ayse Imrohoroglu, Selahattin Imrohoroglu, Thijs Knaap, Georges de Ménil, Pierre Pestieau, Eytan Sheshinski, Matthew Wakefield

    • Hardcover $8.75 £6.99
    • Paperback $35.00 £28.00
  • Children and Pensions

    Children and Pensions

    Alessandro Cigno and Martin Werding

    An analysis of the effect of public pension schemes on a country's fertility rate and a proposal for policies to reform pension coverage in light of this.

    The rapidly aging populations of many developed countries—most notably Japan and member countries of the European Union—present obvious problems for the public pension plans of these countries. Not only will there be disproportionately fewer workers making pension contributions than there are retirees drawing pension benefits, but the youth-to-age imbalance would significantly affect the total contributive capacity of future generations and hence their total income growth. In Children and Pensions, Alessandro Cigno and Martin Werding examine the way pension policy and child-related benefits affect fertility behavior and productivity growth. They present theoretical arguments to the effect that public pension coverage as such will reduce aggregate fertility and may raise aggregate household savings. They argue further that public pensions, as they are currently designed, discourage parents from private human capital investment in their children to improve the children's future earning capacity. After an overview of pension and child benefit policies (focusing on the European Union, Japan, and the United States), the authors offer an empirical and theoretical analysis and a simulation of the effects of the policies under discussion. Their policy proposals to address declines in fertility and productivity growth include the innovative suggestion that relates a person's pension entitlements to his or her number of children and the children's earning ability—proposing that, in effect, a person's pension could be financed in part or in full by the pensioner's own children.

    • Hardcover $8.75 £6.99
    • Paperback $30.00 £25.00
  • Institutions and Norms in Economic Development

    Institutions and Norms in Economic Development

    Mark Gradstein and Kai A. Konrad

    Experts address “the development puzzle”—unprecedented growth coupled with unequal distribution of that growth across different countries—and focus on the importance of institutional arrangements and norms and culture.

    Recent decades have seen almost unprecedented economic growth in income per capita around the world. Yet this extraordinary overall performance masks a wide variation in growth rates across different countries, with persistent underdevelopment in some parts of the world. This disparity constitutes “the development puzzle,” and it is exemplified by growth spurts in China and India that contrast markedly with disturbingly low growth rates in sub-Saharan Africa. In this volume, economists address issues of inequality and growth, going beyond narrowly defined “economic” factors to consider the effect on growth of the structure of governance, the quality of a country's governing bodies, and the social norms that govern collective decision-making. The contributors use both formal modeling and empirical analyses to examine how the “soft factors” of institutions and norms interact with growth performance, natural resource endowments, and economic performance. They consider such topics as the effects of decentralization in Africa, fiscal discipline in Indian states, natural resource wealth as a cause of corruption, social violence during the Indonesian financial crisis of 1997 and 1998, and the effect of strong national identity on redistributive politics. Some of their findings suggest that not only do institutions and norms affect economic performance, economic performance itself is a key factor in explaining such governance failures as corruption and the frequency and intensity of economic conflict.

    • Hardcover $32.00 £26.00
    • Paperback $20.00 £15.99
  • Schools and the Equal Opportunity Problem

    Schools and the Equal Opportunity Problem

    Ludger Woessmann and Paul E. Peterson

    Leading researchers from the United States and Europe report on new findings on the effect of education on equal opportunity, using economic and statistical techniques to assess the results of education policy reform in countries including the United States, Britain, Sweden, Germany, and Italy.

    Much educational research today is focused on assessing reforms that are intended to create equal opportunity for all students. Many current policies aim at concentrating extra resources on the disadvantaged. The state-of-the-art research in Schools and the Equal Opportunity Problem suggests, however, that even sizeable differential spending on the disadvantaged will not yield an equality of results. In this CESifo volume, leading scholars from the United States and Europe use the tools of economics to assess the outcome of efforts to solve education's equal opportunity problem in a range of countries, including the United States, Britain, Germany, Sweden, and Italy. The evidence shows some routes for advancement—testing with high performance standards, for example, and well-designed school choice—but also raises considerable doubts about whether many current school policies are effective in dramatically altering the opportunity structure. The evidence presented also calls into question the idea that causal peer effects are very strong. The contributors examine such topics as the link between education and parental income, the problematic past research on peer effects, tracking, the distribution of educational outcomes, human capital policy aimed at disadvantaged students, and private/public school choice. The research suggests that achieving universal primary and secondary education is both urgently needed and feasible. Will the international community commit the necessary economic, human, and political resources? The challenge, say the editors, is "as inspiring and formidable... as any extraterrestrial adventures—and far more likely to enrich and improve life on earth."

    • Hardcover $8.75 £6.99
  • Economics and Psychology

    Economics and Psychology

    A Promising New Cross-Disciplinary Field

    Bruno S. Frey and Alois Stutzer

    Leading economics scholars consider the influence of psychology on economics, discussing topics including pro-social behavior, conditional trust, neuroeconomics, procedural utility, and happiness research.

    The integration of economics and psychology has created a vibrant and fruitful emerging field of study. The essays in Economics and Psychology take a broad view of the interface between these two disciplines, going beyond the usual focus on "behavioral economics." As documented in this volume, the influence of psychology on economics has been responsible for a view of human behavior that calls into question the assumption of complete rationality (and raises the possibility of altruistic acts), the acceptance of experiments as a valid method of economic research, and the idea that utility or well-being can be measured.

    The contributors, all leading researchers in the field, offer state-of-the-art discussions of such topics as pro-social behavior and the role of conditional cooperation and trust, happiness research as an empirical tool, the potential of neuroeconomics as a way to deepen understanding of individual decision making, and procedural utility as a concept that captures the well-being people derive directly from the processes and conditions leading to outcomes. Taken together, the essays in Economics and Psychology offer an assessment of where this new interdisciplinary field stands and what directions are most promising for future research, providing a useful guide for economists, psychologists, and social scientists.

    • Hardcover $34.00 £28.00
    • Paperback $25.00 £20.00
  • Recent Developments in Antitrust

    Recent Developments in Antitrust

    Theory and Evidence

    Jay Pil Choi

    Specialists discuss current conceptual and empirical issues involved in the formulation and enforcement of antitrust policy.

    Antitrust policy in the United States and Europe relies increasingly on economic analysis. Economic theory and empirical analysis play a central role in antitrust decisions in the courts and in the formulation and enforcement of policy. Antitrust cases are argued using sophisticated economic thinking; both plaintiffs and defendants in U.S. v. Microsoft, for example, made extensive use of game theory, the economics of information, and transaction cost economics in their arguments. In this CESifo volume, specialists from the United States and the European Union examine conceptual and empirical issues involved in antitrust policy in light of recent developments in the field.The first three chapters address theoretical issues that have been important in recent antitrust actions: durable goods markets, two-sided markets and platform competition, and tying arrangements. Contributors then take up empirical concerns, discussing such topics as bundling and tying as seen in the market for cold and pain-relief medicine; the political aspects of merger control; and market definition and differentiated products in the car and soft drink markets. Contributors also address antitrust and regulatory issues in markets with imperfect information, examining comparative advertising and incentives for information disclosure. The final chapter treats the ownership structure of cable television networks and its effect on competition in the local access market. The importance of economic analysis in antitrust policy makes this overview of recent theoretical and empirical developments essential reading for academics and policymakers.

    Contributors Mark Armstrong, Francesca Barigozzi, Randy Brenkers, Duarte Brito, Jay Pil Choi, David S. Evans, Vivek Ghosal, Jos Jansen, Franco Mariuzzo, Martin Peitz, Pedro Pereira, Michael Salinger, Frank Verboven, Michael Waldman, Patrick Paul Walsh, Ciara Whelan.

    • Hardcover $8.75 £6.99
    • Paperback $25.00 £20.00
  • Privatization Experiences in the European Union

    Privatization Experiences in the European Union

    Marko Köthenbürger, Hans-Werner Sinn, and John Whalley

    Experts evaluate the varied outcomes of privatization experiences in Austria, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Spain, and the UK.

    The trend toward privatization, which began with privatization experiments in the UK under Margaret Thatcher and the deregulation of the telecommunications sector in the United States, has attracted the attention of policymakers over the past two decades. Privatization is broadly supported by most academic economists, but the results of actual privatization efforts seem mixed. In the UK, for example, telecom rates fell sharply after privatization, but privatized rail service was widely perceived to have declined dramatically in quality. In this CESifo volume, international experts examine the experiences of 10 EU countries, evaluating the real outcomes of privatization policies in Austria, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Spain, and the UK.The effects of privatization—which includes not only changes in ownership of public activitiesand entities but also liberalization of markets and deregulation—are difficult to distinguish from the effects of other economywide influences. The studies in this volume meet this methodological challenge by using a well-defined set of criteria, including reducing consumer prices, increasing quantity, and improving quality, by which to make their assessments. Background chapters provide a conceptual framework for considering the issues.

    Contributors Pablo Arocena, Sean D. Barrett, Ansgar Belke, Michel Berne, Henrik Christoffersen, Andrea Goldstein, Günter Knieps, David Newbery, Martin Paldam, David Parker, Gérard Pogorel, Friedrich Schneider, Eric van Damme, Ingo Vogelsang, Johan Willner

    • Hardcover $9.75 £7.99
  • Tax Policy and Labor Market Performance

    Tax Policy and Labor Market Performance

    Jonas Agell and Peter Birch Sørensen

    The effect of tax policies and welfare state incentives on the performance of the labor market: theoretical and empirical analyses by leading European and American economists.

    High unemployment in many European OECD countries has been attributed to factors ranging from rigid wages and low job mobility to an interaction of high taxes and generous social benefits that may discourage labor force participation and encourage the growth of an underground economy. This CESifo volume analyzes the effect of tax policy and, more generally, welfare state incentives, on the performance of the labor market. The contributors, all leading international economists, take both theoretical and empirical approaches; the book includes general overviews as well as in-depth analyses of specific policies. Some chapters take a broad perspective on taxation and labor markets, considering such topics as the effects of taxes in both the conventional model of a competitive labor market and a more realistic imperfect market, the observed work differentials between Europe and the United States, and the potential for progressive taxes and redistributive benefits to boost employment. Other chapters examine the effects of tax reforms, including the Earned Income Tax Credit, and the wage-increasing effects of progressive income taxes in a highly unionized labor market. Finally, the contributors analyze the effects of employment protection and tax penalties on the growth of the underground economy. The insights offered in these studies will be valuable to the policy analyst as well as to the academic theorist.

    Contributors Jonas Agell, Dan Anderberg, Søren Arnberg, A. Lans Bovenberg, Nada Eissa, Anders Holm, Hilary Hoynes, Henrik Jacobsen Kleven, Ann-Sofie Kolm, Birthe Larsen, Stephen Nickell, Peter Birch Sørensen, Frederick van der Ploeg, Claus Thustrup Kreiner, Torben Tranæs

    • Hardcover $9.75 £7.99
    • Paperback $35.00 £28.00
  • Competitive Failures in Insurance Markets

    Competitive Failures in Insurance Markets

    Theory and Policy Implications

    Pierre-Andre Chiappori and Christian Gollier

    Leading international economists offer new insights on recent developments in the economic analysis of the limits of insurability, with particular attention of adverse selection and moral hazard.

    Risk sharing is a cornerstone of modern economies. It is valuable to risk-averse consumers and essential for investment and entrepreneurs. The standard economic model of risk exchange predicts that competition in insurance markets will result in all individual risks being insured—that all diversifiable risks in the economy will be covered through mutual risk-sharing arrangements—but in practice this is not the case. Many diversifiable risks are still borne by individuals; many environmental, catastrophic, and technological risks are not covered by insurance contracts. In this CESifo volume, leading international economists provide new insights on recent developments in the economic analysis of the limits of insurability. They find that asymmetric information is a central reason why competition in insurance markets may fail to guarantee that mutually advantageous risk exchanges are realized in today's economies. In particular, adverse selection and moral hazard help explain why competitive insurance markets fail to provide an efficient level of insurance and hence why public intervention is required to solve the problem. The contributors offer theoretical models of insurance markets involving adverse selection as well as empirical analyses of health insurance and non-health insurance markets in countries including Australia, Sweden, Switzerland, and the United States.

    Contributors Luis H. B. Braido, Mark J. Browne, Pierre-André Chiappori, Georges Dionne, Irena Dushi, Roland Eisen, Lucien Gardiol, Pierre-Yves Geoffard, Christian Gouriéroux, Chantal Grandchamp, Erik Grönqvist, Luigi Guiso, Paul Kofman, Hansjörg Lehmann, Gregory P. Nini

    • Hardcover $10.75 £8.99
    • Paperback $40.00 £32.00
  • Japan's Great Stagnation

    Japan's Great Stagnation

    Financial and Monetary Policy Lessons for Advanced Economies

    Michael M. Hutchison and Frank Westermann

    Experts on the Japanese economy examine Japan's prolonged period of economic underperformance, analyzing the ways in which the financial system, monetary policy, and international financial factors contributed to its onset and duration.

    After experiencing spectacular economic growth and industrial development for much of the postwar era, Japan plunged abruptly into recession in the early 1990s and since then has suffered a prolonged period of economic stagnation, from which it is only now emerging. Japan's malaise, marked by recession or weak economic activity, commodity and asset price deflation, banking failures, increased bankruptcies, and rising unemployment, has been the most sustained economic downturn seen in the industrial world since the 1930s. In Japan's Great Stagnation, experts on the Japanese economy consider key questions about the causes and effects of Japan's prolonged period of economic underperformance and what other advanced economies might learn from Japan's experience. They focus on aspects of the financial and banking system that have contributed to economic stagnation, the role of monetary policy, and the importance of international financial factors—in particular, the exchange rate and the balance of payments.

    Among the topics discussed are bank fragility and the inaccuracy of measuring it by the "Japan premium," the consequences of weak banking regulation, the controversial policy of "quantitative easing," and the effectiveness of currency devaluation for fighting deflation. Taken together, the contributions demonstrate the importance of a sound financial sector in fostering robust growth and healthy economies—and the enormous economic costs of a dysfunctional financial system.

    Contributors Yoichi Arai, Robert Dekle, Zekeriya Eser, Eiji Fujii, Kimie Harada, Takeo Hoshi, Michael M. Hutchison, Takatoshi Ito, Ken Kletzer, Nikolas Müller-Plantenberg, Kunio Okina, Joe Peek, Eric S. Rosengren, Shigenori Shiratsuka, Mark M. Spiegel, Frank Westermann, Nobuyoshi Yamori

    • Hardcover $9.75 £7.99
  • Institutions, Development, and Economic Growth

    Institutions, Development, and Economic Growth

    Theo S. Eicher and Cecilia García-Peñalosa

    Leading international economists discuss how and why institutions influence growth; empirical and theoretical studies that provide an overview and contribute to the current research.

    The determinants of economic growth and development are hotly debated among economists. Financial crises and failed transition experiments have highlighted the fact that functioning institutions are fundamental to the goal of achieving economic growth. The growth literature has seen an abundance of empirical studies on the influence of institutions and the mechanisms by which institutions affect development. This CESifo volume provides a systematic overview of the current scholarship on the impact of institutions on growth.The contributors, all internationally prominent economists, consider theoretical and empirical relationships between institutions and growth. Concepts covered include "appropriate institutions" (the idea that different institutional arrangements are appropriate at different stages of economic development); liberalized credit markets; the influence of institutions on productivity; institutional and regulatory reforms in the OECD; how innovation and entrepreneurship influence growth (including an analysis of patent activity in the United States from 1790 to 1930); the endogeneity of institutions as seen in the recruitment of elites by higher education institutions; the effect of economic development on transitions to democracy; and technology adoption in agriculture.

    Contributors Philippe Aghion, Costas Azariadis, Elise S. Brezis, Matteo Cervellati, François Crouzet, David de la Croix, Theo S. Eicher, Piergiuseppe Fortunato, Cecilia García-Peñalosa, Thorvaldur Gylfason, Murat Iyigun, B. Zorina Khan, Giuseppe Nicoletti, Dani Rodrik, Stefano Scarpetta, Kenneth L. Sokoloff, Uwe Sunde, Utku Teksoz, Gylfi Zoega

    • Hardcover $8.75 £6.99
  • Structural Unemployment in Western Europe

    Structural Unemployment in Western Europe

    Reasons and Remedies

    Martin Werding

    Leading international economists examine the different patterns and long-term trends behind persistent unemployment across Western Europe in light of recent developments in labor market theory.

    Structural unemployment, or persistently high levels of unemployment that do not follow the ups and downs of a typical business cycle, varies significantly across industrialized countries. In this CESifo volume, leading labor economists analyze the widely diverging patterns of long-term unemployment across Western Europe. Drawing on recent developments in labor market theory and macroeconomics to explain the emergence and persistence of unemployment, the studies look for fundamental explanations and common patterns that might lead to policy solutions.The two opening chapters offer overviews of the problem: European labor market expert Stephen Nickell highlights the unemployment situation in the "Big Four" continental European states of France, Germany, Italy, and Spain, and American economist Edmund S. Phelps focuses on new theoretical approaches that examine institutional factors influencing unemployment in a given country. Following these introductory essays, prominent economists consider the experiences of their home countries, in chapters on Denmark, Sweden, the Netherlands, Finland, Ireland, the United Kingdom, France, Germany, Italy, and Spain. By taking advantage of the richness of research conducted at a national level and making the work accessible to an international audience, this volume contributes to a new understanding of structural unemployment and how it can be overcome through labor market reforms and other economic policy measures.

    Contributors Torben Andersen, Samuel Bentolila, Norbert Berthold, Guiseppe Bertola, Rainer Fehn, Pietro Garibaldi, Bertil Holmlund, Juan F. Jimeno, Erkki Koskela, Stephen J. Nickell, Jan C. van Ours, Edmund S. Phelps, Jean Pisany-Ferry, Christopher Pissarides, Roope Uusitalo, Brendan Walsh, Martin Werding

    • Hardcover $10.75 £8.99
  • Social Security and Early Retirement

    Social Security and Early Retirement

    Robert Fenge and Pierre Pestieau

    Theoretical and empirical analysis of the relationship between retirement decision and pension systems, with policy recommendations for reversing the current trend toward early retirement.

    The contrasting trends toward earlier retirement and greater longevity have resulted in steadily increasing retirement costs over the last forty years. One important factor influencing early retirement decisions is the expansion of retirement benefits; but studies predict that most countries, particularly those with early retirement incentives, will be unable to meet future pension and social security obligations. In this timely CESifo volume, Robert Fenge and Pierre Pestieau examine empirical and theoretical evidence that explains why early retirement has become such a burden for social security systems and suggest pension system reforms that will reverse the trend.

    Drawing on evidence from the European Union (with comparisons to other industrialized countries including the United States and Canada), the authors demonstrate that the effective retirement age is influenced by social security regulations (such as a change in eligibility age) and discuss ways of measuring these embedded incentives. Fenge and Pestieau examine the implicit taxes on prolonged working life from normative and political economy perspectives. They discuss optimal payroll tax rates that minimize distortions of labor supply and retirement decisions and consider alternative ways to finance benefits, including consumption and capital income taxation. They discuss why policies are designed to discourage employment among older workers and why reforms to counter this often meet resistance. They demonstrate, contrary to the belief of many European governments, that pushing older workers into retirement does not free jobs for young unemployed workers. They show that the gap between salaries and productivity is an incentive for employers to rid themselves of older workers and argue that governments should not support this behavior by compensating older workers for the difference between severance payments and salaries in early retirement programs.

    • Hardcover $7.75 £5.99
  • Prospects for Monetary Unions after the Euro

    Prospects for Monetary Unions after the Euro

    Paul De Grauwe and Jacques Mélitz

    Empirical and theoretical studies on such questions as the desirability and optimal functioning of monetary unions, the enlargement of the eurozone, and the institution of monetary unions in Latin America and East Asia.

    The process of monetary integration in Europe began amid widespread skepticism among economists about the project. But today the success of the euro has prompted a reconsideration of whether monetary unions should be implemented elsewhere. This CESifo volume assesses contemporary theoretical and empirical work on optimal currency areas, considering such questions as the expansion of the eurozone, the institution of monetary unions in Latin America and East Asia, and the effect of monetary unions on the working of the "real economy."

    The first chapters consider the issues surrounding the enlargement of the eurozone, discussing, among other topics, its effect on labor market reforms, the empirical validity of the "endogeneity of the optimum currency criteria" hypothesis, and the integration process of Central European countries into the eurozone. Other chapters consider such topics as the effect of monetary unions on trade flows, risk-sharing mechanisms to protect against asymmetric shocks, dollarization in Latin America, and the potential for a monetary union of China, Japan, and South Korea based on a common business cycle and high correlation of their output behavior. These studies add significantly to our knowledge of the economics of monetary integration.

    • Hardcover $10.75 £8.99
    • Paperback $40.00 £32.00
  • Boom-Bust Cycles and Financial Liberalization

    Boom-Bust Cycles and Financial Liberalization

    Aaron Tornell and Frank Westermann

    Analysis and evidence of how the factors that give rise to boom-bust cycles in fast-growing developing economies also enhance long-run growth.

    The volatility that has hit many middle-income countries (MICs) after liberalizing their financial markets has prompted critics to call for new policies to stabilize these boom-bust cycles. But, as Aaron Tornell and Frank Westermann point out in this book, over the last two decades most of the developing countries that have experienced lending booms and busts have also exhibited the fastest growth among MICs. Countries with more stable credit growth, by contrast, have exhibited, on average, lower growth rates. Factors that contribute to financial fragility thus appear, paradoxically, to be a source of long-run growth as well. Tornell and Westermann analyze boom-bust cycles in the developing world and discuss how these cycles are generated by credit market imperfections. They explain why the financial liberalization that allows countries to overcome imperfections impeding rapid growth also generates the financial fragility that leads to greater volatility and occasional crises. The conceptual framework they present illustrates this linkage and allows Tornell and Westermann to address normative questions regarding liberalization policies.The authors also characterize key macroeconomic regularities observed across MICs, showing that credit markets play a key role not only in boom-bust episodes but in the strong "credit channel" observed during tranquil times. A theoretical framework is then presented that explains how credit market imperfections can account for these empirical patterns. Finally, Tornell and Westermann provide microeconomic evidence on the credit market imperfections that drive the results of the theoretical framework, finding that asymmetries between tradables and nontradables are key to understanding the patterns in MIC data.

    • Hardcover $32.00 £26.00
    • Paperback $20.00 £15.99
  • Alleviating Urban Traffic Congestion

    Alleviating Urban Traffic Congestion

    Richard Arnott, Tilmann Rave, and Ronnie Schöb

    Argues that urban transport economists should be less preoccupied with congestion pricing as the way of alleviating urban traffic congestion and should devote more of their attention to the study of policies that operate at a more microscopic scale—the scale at which urban transport policy decisions are made.

    In 2000, the average driver in US metropolitan areas endured 27 hours of traffic delays, a rise from 7 hours in 1980. In many other countries, traffic delays are considerably worse than in the United States, and in developing countries urban traffic congestion is increasing with alarming rapidity. For fifty years, economists have been advocating congestion pricing as the way to deal with urban traffic congestion; but today, even after some successes, congestion pricing is encountering considerable political resistance. The authors of Alleviating Urban Traffic Congestion advocate active consideration of more microscopic policies that attack the problem at the scale at which actual policy decisions are made. Microscopic models, rather than macroscopic models that are too simplified and too aggregated, they argue, will lead to the analysis of a wider and more creative range of policies, at least some of which should work well and be politically acceptable. After developing the themes of the book, the authors illustrate them by examining some areas of urban transport policy that have been neglected by the macroscopic approach. These include downtown parking policy, the encouragement of bicycling, the staggering of work hours by dominant employers, and the use by medium-sized cities of a "multimode" ticket that charges cars entering the city center a toll equal to the transit fare. The reorientation of urban transport analysis that they advocate will by no means eliminate traffic delays but should speed up the adoption of a richer, more flexible, and ultimately more effective set of policies to alleviate urban traffic congestion.

    • Hardcover $9.75 £7.99
  • The European Central Bank

    The European Central Bank

    Credibility, Transparency, and Centralization

    Jakob de Haan, Sylvester C. W. Eijffinger, and Sandra Waller

    An examination of the debates on European Central Bank monetary policy, focusing on issues of transparency, credibility, and accountability and the effect of the ECB's decentralized structure.

    The adoption of the euro in 1999 by 11 member states of the European Union created a single currency area second in economic size only to the United States. The euro zone's monetary policy is now set by the European Central Bank (ECB) and its Governing Council rather than by individual national central banks. This CESifo volume examines issues that have arisen in the first years of ECB monetary policy and analyzes the effect that current ECB policy strategy and structures may have in the future. After a detailed description and assessment of ECB monetary policy making that focuses on such issues as price stability and the predictability of policy decisions, the book turns to two important issues faced by European central bankers: the transparency and credibility of decision making and the ECB's decentralized structure. After showing that transparency in decision making enhances credibility, the book discusses the ECB's efforts at openness, its political independence as guaranteed by law, and its ultimate accountability. The book then considers the effects of the decentralized ECB structure, focusing on business cycle synchronization, inflation differentials, and differences in monetary policy transmission in light of the enlargement of the monetary union. The book also discusses options for ECB institutional reforms, including centralization, vote weighting, and cross-border regional banks.

    • Hardcover $19.75 £15.99
  • The Decline of the Welfare State

    The Decline of the Welfare State

    Demography and Globalization

    Assaf Razin and Efraim Sadka

    An analysis of the welfare state from a political economy perspective that examines the effects of aging populations, migration, and globalization on industrialized economies.

    In The Decline of the Welfare State, Assaf Razin and Efraim Sadka use a political economy framework to analyze the effects of aging populations, migration, and globalization on the deteriorating system of financing welfare state benefits as we know them. Their timely analysis, supported by a unified theoretical framework and empirical findings, demonstrates how the combined forces of demographic change and globalization will make it impossible for the welfare state to maintain itself on its present scale. In much of the developed world, the proportion of the population aged 60 and over is expected to rise dramatically over the coming years—from 35 percent in 2000 to a projected 66 percent in 2050 in the European Union and from 27 percent to 47 percent in the United States—which may necessitate higher tax burdens and greater public debt to maintain national pension systems at current levels. Low-skill migration produces additional strains on welfare-state financing because such migrants typically receive benefits that exceed what they pay in taxes. Higher capital taxation, which could potentially be used to finance welfare benefits, is made unlikely by international tax competition brought about by globalization of the capital market. Applying a political economy model and drawing on empirical data from the EU and the United States, the authors draw an unconventional and provocative conclusion from these developments. They argue that the political pressure from both aging and migrant populations indirectly generates political processes that favor trimming rather than expanding the welfare state. The combined pressures of aging, migration, and globalization will shift the balance of political power and generate public support from the majority of the voting population for cutting back traditional welfare state benefits.

    • Hardcover $6.75 £5.99
  • Exchange Rate Economics

    Exchange Rate Economics

    Where Do We Stand?

    Paul De Grauwe

    Discussions of the different theoretical and empirical paradigms for setting and predicting exchange rates.

    Recent theoretical developments in exchange rate economics have led to important new insights into the functioning of the foreign exchange market. The simple models of the 1970s, which could not withstand empirical evaluation, have been succeeded by more complex models that draw on theoretical work in such areas as the microstructure of financial markets and open economy macroeconomics. Additionally, new and powerful econometric techniques allow researchers to subject exchange rates to stronger empirical analysis.

    This book discusses the divergent theoretical and empirical paradigms used today for setting and predicting exchange rates; the chapters reflect current debates in the field. Some chapters base their analyses on the theoretical framework of representative and fully informed rational agents; others are grounded in the hetereogeneity of agents who use different and incomplete sets of information. Still other chapters analyze empirical data to uncover the fundamental characteristics of exchange rates. Taken together, these competing analyses document the current state of exchange rate economics and point the way to a new consensus about how to predict and explain exchange rate movements.

    • Hardcover $45.00 £38.00
    • Paperback $30.00 £25.00
  • Venture Capital, Entrepreneurship, and Public Policy

    Venture Capital, Entrepreneurship, and Public Policy

    Vesa Kanniainen and Christian Keuschnigg

    Experts in public economics and financial economics discuss the special role of venture capital and if public policy should promote the venture capital industry; empirical and theoretical perspectives are developed.

    The existing literature in both public economics and financial economics often fails to consider how appropriate and effective public policy may be in promoting the venture capital industry. Public economics has dealt extensively with the effect of taxes and subsidies but has neglected the unique role of venture capitalists as active investors who provide not only funding but added value. Financial economics has emphasized the special role of the venture capitalist but has not focused on the real effects of venture capital in industry equilibrium or the role of public policy. This volume in the CESifo Seminar series brings together experts in public and financial economics to develop a theoretically and empirically informed international policy perspective for an era in which policymakers increasingly look to venture capital as a source of jobs, innovation, and economic growth. The chapters in part I analyze data on the levels of venture capital fundraising in Europe, problems in the bank-oriented beginnings of German venture capital finance in the 1970s, and the inefficiency of Canadian labor-sponsored venture capital funds. Part II looks at the effect of venture capital on labor market performance, the importance of exit opportunities, and the effect of information inflows on the venture capital cycle. The chapters in part III take the perspective of public economics, reviewing the role of public policy in addressing potential market failures, improving the quality of venture capital investments, and affecting entrepreneurial business activity through tax policy.

    • Hardcover $9.75 £7.99
  • Labor Market Institutions and Public Regulation

    Labor Market Institutions and Public Regulation

    Jonas Agell, Michael Keen, and Alfons J. Weichenrieder

    The effect of public regulation on the labor market: detailed analyses of a wide range of policy interventions.

    The six studies collected in this CESifo volume analyze the sometimes unpredictable effects of public regulation on the labor market. Examining a wide range of policy interventions—from subsidized employment to an increased tax on capital—and using a variety of methodologies to analyze them, these contributions by leading scholars of the European labor market will advance the policy debate over regulation at a time of serious labor market problems in Europe and elsewhere. The first three chapters of Labor Market Institutions and Public Regulation present empirical findings, comparing the effects of job training and subsidized employment on the Swedish labor market, analyzing the effect of extended unemployment benefits on unemployment duration for older Austrian workers, and examining poor labor market performance in Spain even after policy reforms. The following chapters take a more theoretical approach, applying the analytical tools of theory to policy issues. These three studies examine the general equilibrium repercussions of public support for both basic and higher education, develop an efficiency wage model to analyze mandated severance pay, and compare different kinds of redistribution to low-skill workers financed by an increased tax on capital.

    • Hardcover $8.75 £6.99
    • Paperback $30.00 £25.00
  • The Political Economy of Education

    The Political Economy of Education

    Implications for Growth and Inequality

    Mark Gradstein, Moshe Justman, and Volker Meier

    A theoretical framework for analyzing the complex relationship of education, growth, and income distribution.

    The dominant role played by the state in the financing, regulation, and provision of primary and secondary education reflects the widely-held belief that education is necessary for personal and societal well-being. The economic organization of education depends on political as well as market mechanisms to resolve issues that arise because of contrasting views on such matters as income inequality, social mobility, and diversity. This book provides the theoretical framework necessary for understanding the political economy of education—the complex relationship of education, economic growth, and income distribution—and for formulating effective policies to improve the financing and provision of education. The relatively simple models developed illustrate the use of analytical tools for understanding central policy issues. After offering a historical overview of the development of public education and a review of current econometric evidence on education, growth, and income distribution, the authors lay the theoretical groundwork for the main body of analysis. First they develop a basic static model of how political decisions determine education spending; then they extend this model dynamically. Applying this framework to a comparison of education financing under different regimes, the authors explore fiscal decentralization; individual choice between public and private schooling, including the use of education vouchers to combine public financing of education with private provision; and the social dimension of education—its role in state-building, the traditional "melting pot" that promotes cohesion in a culturally diverse society.

    • Hardcover $7.75 £5.99
  • A Constitution for the European Union

    A Constitution for the European Union

    Charles B. Blankart and Dennis C. Mueller

    International economists and other scholars address the major issues that arise in writing a European constitution, including the evolution of federalism and the role of direct democracy.

    The leaders of European Union member states have declared that a European constitution should take "a clear, open, effective, democratically controlled Community approach." Their goal—that within the Union, "European institutions should be brought closer to its citizens"—raises many questions about implementation. What is the most effective procedure for connecting citizens' preferences to political action and policy choices at the EU level? The contributors to this CESifo volume, internationally prominent economists and other scholars, address the major issues that arise in the writing of a constitution. They do so with the underlying assumption that individuals are rational actors and the goal of the state is to advance their collective interests.

    The ten chapters consider such topics as how a constitution might be designed to prevent military conflict, whether the EU will evolve "by default" into a federal state, the apparent contradiction between the evolutionary development of the EU and the static structure of the constitution, the definition of citizenship and rights, the division and distribution of power, the budgetary deadlock on the provision of public goods and the redistribution of resources, coordinating policy, alternative methods for choosing an EU president, and the role of such direct democracy institutions as referenda and initiatives. The editors conclude by summing up the main arguments advanced to offer a unified sapproach to these issues.

    • Hardcover $8.75 £6.99
  • Measuring the Tax Burden on Capital and Labor

    Measuring the Tax Burden on Capital and Labor

    Peter Birch Sørensen

    A guide to current approaches to measuring the effective tax rate, with case studies that illustrate the different methods discussed.

    Today's highly complicated tax codes have led economists and policy makers depend on simplified summary measures in order to understand how taxes affect the economy. Studies of the effective tax rate—that is, a measurement of the net amount of tax levied on certain economic activities—provide this sort of descriptive summary. Using estimates of effective tax rates, economists can look for evidence of economic behavior under different tax laws and policy makers can evaluate whether the net outcome is in accord with their intentions. Globalization, with its accompanying international mobility of capital and labor, has created a new use for estimates of the effective tax rate as policy makers seek to compare tax burdens in one country with those in another.This book provides an overview of the most important methods currently used to measure effective tax rates, highlighting the advantages and disadvantages of the different approaches and illustrating their use with specific case studies. The contributors, all noted international economists and seasoned policy makers, consider such topics as a new method to measure the effective tax rate on investment, the tax burden on cross-border investment, effective tax rates on human capital, the "Taxing Wages" approach, and measurement at the macro and micro levels.

    • Hardcover $45.00 £38.00
    • Paperback $40.00 £32.00
  • Managing European Union Enlargement

    Managing European Union Enlargement

    Helge Berger and Thomas Moutos

    Leading international economists assess the effects of the 2004 expansion of the European Union.

    In May 2004 the European Union will undergo the largest expansion in its history when ten countries—Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia, and Slovenia—become members. The number of new members and their diversity make this "big bang" enlargement particularly challenging. Not only do these countries vary widely in language, culture, and geography, but also their per capita income is less than half that of existing members. EU officials believe that expanded integration will serve the EU's objectives of peace, stability, prosperity, and democracy; but the less abstract questions of costs and benefits of enlargement are more complex.

    Each of the chapters in this CESifo volume addresses a different aspect of EU expansion. The contributors, all leading international practitioners and scholars, consider such topics as the effect of euro zone expansion on European Central Bank monetary policy making; using the euro as an external anchor for a national currency; worker migration and income differentials; the Swiss experience with immigration policy in a direct democracy framework; detailed sector analysis using a computable general equilibrium model of the world economy; investment and job creation and destruction in incumbent member countries; and the asymmetric effects of enlargement on high- and low-income incumbent countries. Taken together, the chapters provide useful guidance in shaping the EU policies of the future.

    • Hardcover $8.75 £6.99
    • Paperback $35.00 £28.00
  • European Monetary Integration

    European Monetary Integration

    Hans-Werner Sinn, Mika Widgrén, and Marko Köthenbürger

    Studies examining the policy challenges posed by European monetary integration, including asymmetry problems and fiscal concerns.

    The success of European monetary integration—called by the editors of this CESifo volume "one of the most far-reaching, real world experiments in monetary policy to date"—is not assured. Policy makers have been forced to deal with challenges posed by formulating a uniform monetary policy for countries with asymmetric business cycles and economies in different stages of development as well as with the fiscal and financial implications of a unified currency.

    The contributors to European Monetary Integration, all prominent economists and scholars, combine theoretical analysis and policy recommendation in their examination of these difficulties. In the first three chapters they consider issues raised by asymmetry problems, including imperfect labor and goods markets, the problem of monetary policy objectives when "one size does not fit all," and the possibility of a bias toward smaller countries in the "one country, one vote" constitutional structure of the European Central Bank. In the last three chapters, they discuss fiscal concerns, including the distribution of seignorage revenues and the interaction of European Central Bank monetary policies and asset price dynamics.

    • Hardcover $7.75 £5.99
    • Paperback $25.00 £20.00
  • Spectrum Auctions and Competition in Telecommunications

    Spectrum Auctions and Competition in Telecommunications

    Gerhard Illing and Ulrich Klüh

    Leading experts in industrial organization and auction theory examine the recent European telecommunication license auction experience.

    In 2000 and 2001, several European countries carried out auctions for third generation technologies or universal mobile telephone services (UMTS) communication licenses. These "spectrum auctions" inaugurated yet another era in an industry that has already been transformed by a combination of staggering technological innovation and substantial regulatory change. Because of their spectacular but often puzzling outcomes, these spectrum auctions attracted enormous attention and invited new research on the interplay of auctions, industry dynamics, and regulation. This book collects essays on this topic by leading analysts of telecommunications and the European auction experience, all but one presented at a November 2001 CESifo conference; comments and responses are included as well, to preserve some of the controversy and atmosphere of give-and-take at the conference.The essays show the interconnectedness of two important and productive areas of modern economics, auction theory and industrial organization. Because spectrum auctions are embedded in a dynamic interaction of consumers, firms, legislation, and regulation, a multidimensional approach yields important insights. The first essays discuss strategies of stimulating new competition and the complex interplay of the political process, regulation, and competition. The later essays focus on specific spectrum auctions. Combining the empirical data these auctions provide with recent advances in microeconomic theory, they examine questions of auction design and efficiency and convincingly explain the enormous variation of revenues in different auctions.

    • Hardcover $8.75 £6.99
  • Inequality and Growth

    Inequality and Growth

    Theory and Policy Implications

    Theo S. Eicher and Stephen J. Turnovsky

    Even minute increases in a country's growth rate can result in dramatic changes in living standards over just one generation. The benefits of growth, however, may not be shared equally. Some may gain less than others, and a fraction of the population may actually be disadvantaged. Recent economic research has found both positive and negative relationships between growth and inequality across nations. The questions raised by these results include: What is the impact on inequality of policies designed to foster growth? Does inequality by itself facilitate or detract from economic growth, and does it amplify or diminish policy effectiveness? This book provides a forum for economists to examine the theoretical, empirical, and policy issues involved in the relationship between growth and inequality. The aim is to develop a framework for determining the role of public policy in enhancing both growth and equality. The diverse range of topics, examined in both developed and developing countries, includes natural resources, taxation, fertility, redistribution, technological change, transition, labor markets, and education. A theme common to all the essays is the importance of education in reducing inequality and increasing growth.

    • Hardcover $8.75 £6.99
    • Paperback $5.75 £4.99
  • Public Finance and Public Policy in the New Century

    Public Finance and Public Policy in the New Century

    Sijbren Cnossen and Hans-Werner Sinn

    Essays on the theory and practice of public finance and policy.

    The sixteen essays in this book were written to celebrate the ninetieth birthday of Richard Musgrave and to commemorate the tenth anniversary of CES, the Center for Economic Studies at the University of Munich. Musgrave is considered to be a founding father of modern public economics. He belongs to the intellectual tradition that views government as an instrument that can be used to correct market failure and to establish the society that people want. Although his work fits within the individualistic framework of modern economics, he also draws on principles of moral philosophy. The essays take stock of and extend the theory and practice of public finance and public policy. They address the evolving role of government and the welfare state, the interaction between taxation and markets, the future of pension and health care systems, and international tax issues and fiscal federalism.

    • Hardcover $9.75 £7.99
  • Public Finance and Public Choice

    Public Finance and Public Choice

    Two Contrasting Visions of the State

    James M. Buchanan and Richard A. Musgrave

    In this volume, based on a week-long symposium at the University of Munich's Center for Economic Studies, two leading scholars of governmental economics debate their divergent perspectives on the role of government and its fiscal functions. James M. Buchanan, who was influential in developing the research program in public choice, concentrates on the imperfections of the political process and stresses the need for rules to restrain governmental interference. Richard A. Musgrave, a founder of modern public finance, points to market failures and inequities that call for corrective public policies. They apply their differing economic and political philosophies to a variety of key issues. Each presentation is followed by a response and general discussion.

    • Hardcover $50.00 £40.00