|
Applied general equilibrium models: an assessment of their usefulness for policy analysis
Antonio M. Borges
Introduction of a solution algorithm and the increasing power of computers have made possible the development of complex general equilibrium models and their use in analysing economic policy issues. This paper surveys applied general equilibrium models, analyses their advantages and remaining weaknesses for various policy applications, and discusses efforts to improve on existing models and to extend their usefulness. It concludes that general equilibrium models are indispensable in determining long-term effects of a number of important policy measures (e.g. tax reforms) in a consistent manner, although important aspects of real world economies remain to be integrated into these models.
Marginal tax rates on the use of labour and capital in OECD countries
Michael J. McKee, Jacob J.C. Visser et Peter G. Saunders
Concern for the effects of taxation on the incentives to work, to employ labour, to save and to invest has focused the attention of policymakers on marginal tax rates. This paper provides some illustrative total marginal tax rates on factor use for most OECD countries. The rates apply to two related pairs of decisions: to supply/employ labour and to save and invest (supply/demand capital). The rates are "total" in that they attempt to integrate the effects of all taxes levied on these pairs of decisions by all levels of government.
Public debt in a medium-term perspective
Jean-Claude Chouraqui, Brian Jones et Robert Bruce Montador
This article examines the implications of the recent sharp increase in the ratio of public debt to GNP in most OECD Member countries. The evolution of public debt is also analysed within the wider framework of the government sector's net worth. One particular element in this approach - the future pension liabilities of governments - is seen to have a significant bearing on the debt outlook in several countries. The article then assesses the sensitivity of the public debt profile under alternative economic conditions and fiscal policy settings. Finally, it reviews the possible consequences of high and/or rising levels of debt.
The international debt situation and linkages between developing countries and the OECD
Paul Saunders et Andrew Dean
The linkages between the debt situation of some of the most indebted developing countries and conditions in the OECD economies are explored by the use of a model which relates developing country debt to changes in OECD growth, prices, interest rates and other key variables. The way in which financial ratios for certain groups of debtor countries could develop over the next five years is examined on the basis of assumptions about world economic developments. Simulations on alternative assumptions allow an assessment of the importance of the linkages and the sensitivity of the debt situation to developments in the OECD economies.
Pure profits and Tobin's q in nine OECD countries
James H. Chan-Lee
This paper presents valuation ratios (Tobin's q) for nine countries. Tobin's q embodies market expectations and is an indicator of expected pure profit rates on the existing capital stock. Since 1982, equity markets have recovered substantially. By end-1985, values of Tobin's q were close to their 1974 levels and to the symbolic figure of unity. The theoretical and conceptual relevance of q is considered, as well as data and measurement limitations. Real debt and equity costs of finance are considered in the light of buoyant stock markets. The implications of the strong recent recovery in q for investment are also noted.
|
