Tax Policy in the Small Open Economy: A Monetary Approach to A Keynesian Problem

1980 ◽  
Vol 82 (3) ◽  
pp. 378
Author(s):  
John E. Floyd
Keyword(s):  
Open Economy ◽  
Tax Policy ◽  
Small Open Economy ◽  
Monetary Approach

scholarly journals Transfer pricing and the Czech tax policy

2010 ◽  
Vol 58 (6) ◽  
pp. 465-472 ◽  
Author(s):  
Veronika Solilová ◽  
Veronika Sobotková
Keyword(s):  
Czech Republic ◽  
Open Economy ◽  
Tax Policy ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Small Open Economy ◽  
Tax Base ◽  
The Czech Republic ◽  
Eu Member States ◽  
Pricing Rules

The Czech Republic as a small open economy with an extensive network of the international tax treaties for the avoidance of the double taxation prevents from shifting the tax base of the associated enterprises to countries with preferential tax regime through transfer pricing rules. Transfer pricing as one of the important areas of international taxes determines how the profits of the multinational enterprises are split between the jurisdictions in which they operate and which countries get to tax those profits. This situation may affect the global budget of the multinational enterprises and the tax reve­nues of the jurisdictions. This paper is focused on the transfer pricing rules used in the Czech Republic and makes recommendations for the Czech tax policy in this area based on the analysis of the transfer pricing rules in the EU Member States.

scholarly journals Macroeconometric Assessment of Monetary Approach to Balance of Payments in a Small Open Economy: The Nigeria Experience

2020 ◽  
pp. 41-50
Author(s):  
Atoi Ngozi Victor
Keyword(s):  
Open Economy ◽  
Structural Parameters ◽  
Small Open Economy ◽  
Reduced Form ◽  
Foreign Reserve ◽  
Long Run ◽  
Monetary Approach ◽  
Velocity Of Money ◽  
Domestic Credit ◽  
Marginal Propensity

Monetary approach to balance of payment establishes a link between foreign reserve assets and money supply. This link is important for managing balance of payment disequilibrium through adjustment of monetary aggregates. This study relies on the (Polak, 1957;1997) monetary model with data from 2007:Q1 to 2018:Q4 to examine the link between monetary factors and balance of payment in Nigeria. To circumvent simultaneity, the reduced form coefficients of the structural form of the Polak model are estimated using Two Stage Least Squares (TSLS) technique, while the structural parameters are recovered from the estimated reduced form coefficients. The results are enriching and robust. The Johansen cointegration procedure suggests a long run relationship among the macroeconomic variables in the balance of payment function. The estimated balance of payment model reveals that domestic credit is statistically significant and negatively related to foreign reserve assets, implying that balance of payment is a monetary phenomenon in Nigeria. The velocity of money circulation and the marginal propensity to import are approximately 120 percent and 14 percent, respectively. The study therefore recommends that the monetary authority should consider the use of domestic credit for management of balance of payment disequilibrium. It is also pertinent to increase domestic credit to grow the economy since such action will marginally decrease external reserve assets through increase in import, however, the net effect will enhance the overall economy.

scholarly journals Tax Elasticity Estimates for Capital Stocks in Canada

2020 ◽  
Vol 20 (77) ◽  
Author(s):  
Jean-François Wen ◽  
Fatih Yilmaz ◽  
Danea Trejo
Keyword(s):  
Open Economy ◽  
Tax Policy ◽  
Small Open Economy ◽  
Service Industries ◽  
User Cost ◽  
Tax Rate ◽  
Distributed Lag ◽  
Point Reduction ◽  
Distributed Lag Model ◽  
Long Run

The paper provides estimates of the long-run, tax-adjusted, user cost elasticity of capital (UCE) in a small open economy, exploiting three sources of variation in Canadian tax policy: across provinces, industries, and years. Estimates of the UCE with Canadian data are less prone to the endogeneity problems arising from the effects of tax policy changes on the interest rate or on the price of capital equipment. Reductions in the federal corporate income tax rate during the early 2000s for service industries but not for manufacturing, which already benefited from a preferential tax rate, contribute to the identification of the UCE. To capture the long-run relationship between the capital stock and the user cost of capital, an error correction model (ECM) is estimated. Supplementary results are obtained from a distributed lag model in first differences (DLM). With the ECM, our baseline UCE for machinery and equipment (M&E) is -1.312. The corresponding semi-elasticity of the stock of M&E with respect to the METR is about -0.2, suggesting, for example, that a 5 percentage point reduction in the METR, say from 15 to 10 percent, would in the long run generate an increase of 1.0 percent in the stock of M&E. The UCE for non-residential construction is statistically insignificantly different from zero.

THE MONETARY APPROACH TO THE BALANCE OF PAYMENTS: AN APPLICATION TO BARBADOS

2002 ◽  
Vol 47 (02) ◽  
pp. 213-228
Author(s):  
MICHAEL HOWARD ◽  
NLANDU MAMINGI
Keyword(s):  
Exchange Rate ◽  
Open Economy ◽  
Small Open Economy ◽  
Balance Of Payments ◽  
Credit Expansion ◽  
Rate System ◽  
Fixed Exchange Rate ◽  
Monetary Approach ◽  
Monetary Authorities ◽  
Exchange Rate System

This paper examines the monetary approach to the balance of payments in Barbados, a small open economy with a fixed exchange rate system. We use an error correction mechanism (ECM) approach which shows that the monetary approach applies to Barbados. Such an ECM approach has not been previously employed in other related studies. Our analysis has implications for monetary policy since it confirms that excessive credit expansion leads to balance of payments deficits in fixed exchange rate systems, and the monetary authorities need to hold high levels of reserves in small open economy systems to protect the exchange rate.

The long-run stability of a small, open economy under crawling peg regime

2002 ◽  
Vol 52 (1) ◽  
pp. 57-78
Author(s):  
S. Çiftçioğlu
Keyword(s):  
Exchange Rate ◽  
Open Economy ◽  
Risk Premium ◽  
Small Open Economy ◽  
Exchange Rate Policy ◽  
Price Stability ◽  
Output Stability ◽  
Long Run ◽  
The Exchange Rate ◽  
The Impact

The paper analyses the long-run (steady-state) output and price stability of a small, open economy which adopts a “crawling-peg” type of exchange-rate regime in the presence of various kinds of random shocks. Analytical and simulation results suggest that with the exception of money demand shocks, an exchange rate policy which involves a relatively higher rate of indexation of the exchange rate to price level is likely to lead to the worsening of price stability for all types of shocks. On the other hand, the impact of adopting such a policy on output stability depends on the type of the shock; for policy shocks to the exchange rate and shocks to output demand, output stability is worsened whereas for the shocks to risk premium of domestic assets, supply price of domestic output and the wage rate, better output stability is achieved in the long run.

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