Casper van Ewijk

Can abatement resolve the conflict between economic growth and the environment

SummaryThis paper reexamines the link between pollution, abatement policies and economic growth. We develop a Lucas variety of endogenous growth model to formalize the effects of pollution and abatement on growth. Pollution is linked to the scale of production; it has a negative impact on productivity both in directly productive activities and in the learning process. This effect may be mitigated by abatement activities the efficiency of which can be enhanced by investing in abatement technology. We show that less (effective) pollution is associated with higher growth in the steadystate. Also the short term effects are examined, and finally, we discuss the optimal government policies with respect to abatement and taxation.This paper reexamines the link between pollution, abatement policies and economic growth. We develop a Lucas variety of endogenous growth model to formalize the effects of pollution and abatement on growth. Pollution is linked to the scale of production; it has a negative impact on productivity both in directly productive activities and in the learning process. This effect may be mitigated by abatement activities the efficiency of which can be enhanced by investing in abatement technology. We show that less (effective) pollution is associated with higher growth in the steadystate. Also the short term effects are examined, and finally, we discuss the optimal government policies with respect to abatement and taxation.

Progressive taxes, equity, and human capital accumulation in an endogenous growth model with overlapping generations.

Abstract This paper explores the trade-off between efficiency and intra- and intergenerational equity in an endogenous growth model of an open economy with overlapping generations and human capital accumulation. We demonstrate that progressive taxes hurt long-run growth and exacerbate distortions associated with intergenerational spillovers. However, by raising saving, these taxes strengthen the net foreign asset position.

Economic Growth and Funded Pension Systems

Growing pension savings lead to deeper capital markets. This can have a positive effect on economic growth by allowing firms that are more dependent on external finance to grow faster. We study this effect using data on 69 industrial sectors in 34 OECD countries for the period 2001-2010 through a difference-in-differences approach that interacts financial development with industry dependence on external finance. We take into account unobserved heterogeneity by including country-time, industry-time and industry-country fixed effects. We find a significant impact of higher level of pension savings on growth in sectors that are more dependent on external financing. The financial crisis does not significantly affect this relation.

European Tax Coordination in the 21st Century: A Brief Inquiry

This chapter examines the choices between tax competition and tax harmonisation in the European Union. The choices are highlighted on the basis of the trade-offs that can be made between diversity and scale, and between incentives and cooperation. The authors conclude that greater diversity appears feasible with respect to VAT rates, but that greater coordination seems to be required for capital income taxes and the excises. Labour income taxes can be left to the discretion of the member states.

Growth promoting policies, distribution, and the balance of payments

This paper studies the consequences of growth promoting policies for income distribution, aggregate savings, and the balance of payments in a small open economy. We focus on the case of a reduction in capital income taxation. Then the traditional OLG model, which emphasizes the inter-generational distribution, predicts that both investment and consumption are boosted. It is obvious then that the trade balance deteriorates. However, we show that this result is no longer robust if one allows for heterogeneity of agents within each generation. Then the intra-generational distribution effect, which implies a negative relationship between the share of capital income and aggregate consumption, may cause consumption to decline, and the trade balance to improve. This effect concurs with the classical, or “post-Keynesian” view on the relationship between distribution and savings. This post-Keynesian effect is, however, important for the short run only; the long-term result for the trade balance is not essentially changed by allowing for intra-generational heterogeneity.

The distribution of Seigniorage in The Netherlands

SummaryThis paper investigates the revenue from money and its distribution between the government and the central bank. An accounting framework is developed taking explicit account of stock and flow aspects of monetary revenue. Application of this framework to data for The Netherlands shows that although the overall revenue from money in the period 1949–1989 was sizeable, the central government did not really benefit from its monetary monopoly.

Interest payments and the stability of the government budget deficit in an open and growing economy

SummaryThis article discusses the basic determinants of stability and instability of the accumulation of public debt in an open and growing economy. Unlike most previous studies which start from the basically short term IS-LM framework, this analysis centers on the long-term dynamics arising from the government budget restraint, the balance of payments restraint and the interaction between growth and income distribution. Several policy regimes for the governments budget are taken into consideration and specific attention is paid to the question of whether monetary and fiscal policy can effectively ensure the stability of the system.