Jarig van Sinderen

Endogenizing technological progress: The MESEMET Model

This paper endogenizes technology and human capital formation in the MESEM model that was developed by van Sinderen (Economic Modelling, 1993, 13, 285-300). Tax allowances for private R&D expenditures and public expenditures on both education and R& D are effective instruments to stimulate economic growth. Simulations with respect to market clearing, the importance of supply-side elements and key parameters (such as the magnitude of spillovers and substitution elasticities) reveal that tax allowances for private R & D are the most robust instrument to increase economic growth through the accumulation of knowledge. Contrary to other studies that find that technology policies typically reduce employment, we find that overall employment rises.

Taxation and economic growth : Some calculations with a macroeconomic semi-equilibrium model for the Dutch economy (MESEM)

Abstract This paper investigates the effects of taxation and government spending within a macroeconomic semi-equilibrium framework for the Netherlands. The model occupies a position in between general equilibrium models and empirical traditional macromodels: markets tend towards equilibrium in the long run, but do not always clear in the short term. Balanced budget reductions in taxes on wages and profits exert favourable effects on employment and growth. The relative impact depends on the specific government outlays and taxes which are cut back. In the long run, tax revenue decreases less than the amount of the initial tax reduction.

Welfare Effects of Different Public Expenditures and Taxes in the Netherlands

This paper explores the welfare effects of public consumption, income transfers and public investment financed through different types of taxes. One surprising result is that, contrary to public consumption goods, public capital goods do not necessarily become less attractive if distortionary taxes, rather than lump-sum taxes, are necessary to finance them. The numerical simulations reveal that the net welfare effects of public investments in the Netherlands are typically positive if financed through lump-sum taxes or distortionary taxes on labor. However, if a source-based capital tax is adopted to finance public investments, the overall welfare effect may be negative.

The influence of tax and expenditure policies on economic growth in The Netherlands: An empirical analysis

SummaryThis paper explores the influence of government policies in explaining output, emploment and investment in The Netherlands during the period 1966–1989. The paper develops an empirical macroeconomic model estimated with annual data relating to the period 1958–1989. It finds that restrictive fiscal policies in the eighties have had adverse short-term effects on output and employment. Furthermore, the drop in the rate of increase in tax and social security contribution rates in this period has boosted output, employment and investment. However, the shift in public expenditure from investment to consumption has exerted a negative impact on these variables, largely offsetting the positive impact of the tax policies.

Applied General Equilibrium Modelling

Over the last decade or so, applied general equilibrium models have rapidly become a major tool for policy advice on issues regarding allocation and efficiency, most notably taxes and tariffs. This reflects the power of the general equilibrium approach to allocative questions and the capability of todays applied models to come up with realistic answers. However, it by no means implies that the theoretical, practical and empirical problems faced by researchers in applied modelling have all been solved in a satisfactory way. Rather, a promising field of research has been opened up, inviting theorists and practitioners to further explore and exploit its potential. The state of the art in applied general equilibrium modelling is reflected in this volume. The introductory Chapter (Part I) evaluates the use of economic modelling to address policy questions, and discusses the advantages and disadvantages of applied general equilibrium models. Three substantive issues are dealt with in Chapters 2-8: Tax Reform and Capital (Part II), Intertemporal Aspects and Expectations (Part III), and Taxes and the Labour Market (Part IV). While all parts contain results relevant for economic policy, it is clear that theory and applications for these areas are in different stages of development. We hope that this book will bring inspiration, insight and information to researchers, students and policy advisors.