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Tax policies, vintage capital, and exit and entry of plantsChang, Shao-Jung 12 April 2006 (has links)
Following Chamley, Lucas, Laitner, and Aiyagari, this dissertation continues to
explore the answer for the question of zero capital taxation by discussing how taxes
on capital income, labor income, and property affect the economy in the context
of a vintage capital model where the embodied technology grows exogenously. The
government maximizes social welfare by finding the optimal combinations of the three
tax rates in the steady state and examines the welfare gain/loss over and after the
transitions caused by different types of shocks. The simulation method used here is
linear approximation.
My results show that in the steady-state economy, given a fixed level of gov-
ernment expenditure and a zero property tax rate, the capital-income tax rate that
maximizes steady-state utility may be negative, zero, or positive depending on the
level of government expenditure. I also find that, for many values of government
spending, the highest level of steady-state utility occurs with a subsidy to capital
income and a tax on labor income. Finally, I find that when taxes on capital income,
labor income, and property are available, capital-income taxes are generally the last
resort to finance government expenditures.
My results show that in the transitional economy, when tax rates are perma-
nently changed and the government expenditure is near zero, the loss of utility over
the transition from no taxes to capital subsidies is too large so the idea itself is not
utility-enhancing. Secondly, I find that when the government expenditure is low and
a positive technology shock occurs, social welfare in the economy without capital-income taxes may perform better in the early phase of the transition but worse in the
later phase of the transition than that in the economy without property taxes. How-
ever, the situation becomes the opposite as government expenditures increase. In
addition, when one tax is allowed to change, a changing labor-income tax may bring
more utility over the transition than the other two taxes. Finally, when the govern-
ment expenditure is unexpectedly reduced, I find that using property taxes rather
than capital-income taxes stimulates consumption and employment more given a
higher initial level of government expenditure.
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Economic dynamics with heterogeneous capital goodsZou, Benteng 21 June 2005 (has links)
In this thesis, we will relax two major assumptions in economic growth theory. First of all, we will study growth models with eterogeneous capital goods, the so called vintage capital
models: technological advances are not incorporated in all generations of capital goods and there is an optimal age distribution of the capital stocks. We will devote the three first
chapters of this thesis to this class of models. Several lessons on technology diffusion will be extracted, notably in connection with the nowadays hot debate on energy saving, technology
progress, growth and environmental policy. Secondly, we will introduce explicitly the geographical dimension to the neoclassical growth
models, which allow us to build a new class of models. We call them geographic growth models. In this framework, we will identify the consequences of capital mobility across space. In particular, we will examine the optimal stationary distribution of capital across space. Under this framework, we could (i) study the continuous
space structure, and (ii) allow capital accumulation.
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Economic growth and the use of non-renewable energy resourcesPérez-Barahona, Agustín 29 March 2007 (has links)
This thesis is a contribution to the analysis of the relationship between the economic growth and the usage of non-renewable energy resources. More precisely, it is studied the conditions under which energy-saving technologies can sustain long-run growth, even if energy is mainly produced by means of non-renewable energy resources, such as fossil fuels. A general equilibrium framework is considered, giving special attention to the dynamical properties of the economy. In accordance with the well-known debate of complementarity vs. substitutability
between physical capital and energy as production inputs, this thesis is divided into two parts.
The first part of this thesis assumes complementarity between physical capital and energy as production inputs, which captures the
idea of the existence of a minimum energy requirement to use a machine. Even if in contrast with the standard literature on non-renewable energy resources, which assumes substitutability, the assumption of complementarity is indeed supported by various empirical studies. This relationship of complementarity allows one to introduce the assumption of different generations of machines coexisting in each period by adding a new variable to the firm's problem: physical capital replacement. In this first part of the thesis, it is provided a theoretical study of physical capital replacement, i.e., vintage effect, which is an important environmental policy when new machines are assumed to be more energy-saving.
Following the standard literature on non-renewable energy resources, this second part of the thesis assumes substitutability between capital and energy. This branch of the literature gives central position to physical capital accumulation to offset the constraint on production possibilities due to use of non-renewable energy resources. This literature assumes the same technology for both physical capital accumulation and consumption, which implies (among other things) that the energy intensity of both sectors is the same. However, data do not support this implication and suggest that physical capital accumulation is relatively more energy-intensive than consumption. Following
that, this second part of the thesis studies the implications of this hypothesis.
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