The Effects of the Frequency and Implementation Lag of Basket Updates on the Canadian CPI

In this article, we examine the effects of different frequencies and implementation months of basket updates on the fixed-basket price index – the Lowe index, through theoretical analysis and empirical simulation using Canadian data from 2000 to 2013. We find that both an increased frequency of basket updates and a faster implementation of these new baskets will reduce substitution bias in the CPI. However, we also find that improvements to the method of accelerating frequency has diminishing marginal returns in practice – as each subsequent increase in the frequency with which the CPI basket is updated has a less pronounced effect; and the ideal link-month when a new basket is implemented is unpredictable, since the impact of the implementation lag depends upon the consistency between short-term price movements and long-term price trends.

DOES THE ADVERSE ANNOUNCEMENT EFFECT OF CLIMATE POLICY MATTER? — A DYNAMIC GENERAL EQUILIBRIUM ANALYSIS

We consider a carbon emissions tax announced today, but implemented after a known time-lag. Before implementation, the announcement induces higher emissions than without intervention. In welfare terms, this adverse announcement effect could more than outweigh the gain after tax implementation. We quantify a “critical lag” such that a shorter (longer) implementation lag is a welfare gain (loss) over no-intervention. We identify resource scarcity as the main driver for a short critical lag. The model is a global Ramsey Model extended by an exhaustible carbon resource and linked to a climate model.

PREANNOUNCED OPTIMAL TAX REFORM

In constitutional democracies, laws take time to be deliberated upon, to be passed, and to be implemented. Motivated by this observation, we study the properties of optimal tax reform when it has to be announced in advance of its implementation. We find that a delay between announcement and implementation has large effects on the optimal fiscal policy during the transition to the new steady state. On the other hand, we find that the welfare gains from optimal tax reform are fairly robust to the introduction of an implementation lag. Increasing the lag from zero to four years reduces the welfare gains by less than a quarter. Moreover, it turns out that this reduction of the welfare gain is mainly due to the delay itself rather than the effect of preannouncement on the character of the optimal tax reform.

Improving Cognitive Case Formulations and Treatment Planning in Clinical Practice and Research

An individualized case formulation may be useful for determining when and for how long components of certain manual-based (MB) treatments should be used. Such a formulation is essential for treatment planning and implementation for cases where empirically supported standardized treatments are not available. Yet, procedures to develop valid individualized cognitive case formulations and to use them in treatment planning and implementation lag behind the standards used to develop MB treatments. The present article describes some of these problems and issues and suggests procedures that clinicians may use to address these issues in research or practice.