We investigate conditions sufficient for identification of average treatment effects using instrumental variables. First we show that the existence of valid instruments is not sufficient to identify any meaningful average treatment effect. We then establish that the combination of an instrument and a condition on the relation between the instrument and the participation status is sufficient for identification of a local average treatment effect for those who can be induced to change their participation status by changing the value of the instrument. Finally we derive the probability limit of the standard IV estimator under these conditions. It is seen to be a weighted average of local average treatment effects.

Evolution and Rationality Some Recent Game-Theoretic Results. Identification and Estimation of Local Average Treatment Effects

The crisis of 2008-09 has focused attention on money and credit fluctuations, financial crises, and policy responses. In this paper we study the behavior of money, credit, and macroeconomic indicators over the long run based on a newly constructed historical dataset for 12 developed countries over the years 1870-2008, utilizing the data to study rare events associated with financial crisis episodes. We present new evidence that leverage in the financial sector has increased strongly in the second half of the twentieth century as shown by a decoupling of money and credit aggregates, and we also find a decline in safe assets on banks' balance sheets. We also show for the first time how monetary policy responses to financial crises have been more aggressive post-1945, but how despite these policies the output costs of crises have remained large. Importantly, we can also show that credit growth is a powerful predictor of financial crises, suggesting that such crises are

Credit Booms Gone Bust: Monetary Policy, Leverage Cycles and Financial Crises, 1870-2008

The financial crisis has refocused attention on money and credit fluctuations, financial crises, and policy responses. We study the behavior of money, credit, and macroeconomic indicators over the long run based on a new historical dataset for 14 countries over the years 1870-2008. Total credit has increased strongly relative to output and money in the second half of the twentieth century. Monetary policy responses to financial crises have also been more aggressive, but the output costs of crises have remained large. Credit growth is a powerful predictor of financial crises, suggesting that policymakers ignore credit at their peril. (JEL E32, E44, E52, G01, N10, N20)

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This paper explains the key factors that determine the output multiplier of government purchases in New Keynesian models, through a series of simple examples that can be solved analytically. Sticky prices or wages allow for larger multipliers than in a neoclassical model, though the size of the multiplier depends crucially on the monetary policy response. A multiplier well in excess of 1 is possible when monetary policy is constrained by the zero lower bound, and in this case welfare increases if government purchases expand to partially flll the output gap that arises from the inability to lower interest rates.

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Simple Analytics of the Government Expenditure Multiplier

For US annual data that include World War II, the estimated multiplier for temporary defense spending is 04–05 contemporaneously and 06–07 over 2 years If the change in defense spending is “permanent” (gauged by Ramey's defense news variable), the multipliers are higher by 01–02 Since all estimated multipliers are significantly less than 1, greater spending crowds out other components of GDP, particularly investment The lack of good instruments prevents estimation of reliable multipliers for nondefense purchases; multipliers in the literature of two or more likely reflect reverse causation from GDP to nondefense purchases Increases in average marginal income tax rates (measured by a newly constructed time series) have significantly negative effects on GDP When interpreted as a tax multiplier, the magnitude is around 11 The combination of the estimated spending and tax multipliers implies that the balanced-budget multiplier for defense spending is negative We have some evidence that tax changes affect GDP mainly through substitution effects, rather than wealth effects

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Macroeconomic Effects From Government Purchases and Taxes

Are firms sophisticated maximizers, or do they consistently make errors? Using transaction-level data from Ugandan value-added tax (VAT) returns, we show that sellers and buyers report different amounts 79% of the time, despite invoices being easily cross-checked. We estimate that 25% of firms are disadvantageous misreporters-they systematically misreport own sales and purchases such that their tax liability increases-while 75% are advantageous misreporters. Many firms-especially disadvantageous misreporters-fail to report imported inputs they themselves reported at Customs, increasing their VAT liability. On net, unilateral VAT misreporting cost Uganda about US$384 million in foregone 2013-2016 tax revenue.

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Strategic or Confused Firms? Evidence from "Missing" Transactions in Uganda

espanolEn este articulo se estudia como reacciona la renta gravable de los contribuyentes espanoles ante cambios en los tipos marginales del IRPF, utilizando como principal fuente de identificacion la variacion proporcionada por tres grandes reformas del impuesto introducidas a lo largo del periodo 1999-2014. Las estimaciones mas fiables de la elasticidad de la renta gravable con respecto al tipo marginal neto del impuesto para este periodo se situan en el rango comprendido entre 0,45 y 0,64. Esta elasticidad es cerca de tres veces mayor para los contribuyentes autonomos que para los trabajadores, y es mayor para las rentas procedentes de las actividades economicas que para las rentas del trabajo y del capital. La elasticidad de la renta bruta es menor, entre 0,10 y 0,24, mientras que la elasticidad de algunas deducciones como las de planes de pensiones privados excede de 1. Las estimaciones obtenidas son similares cuando se utiliza una amplia variedad de metodos de estimacion y restricciones muestrales, y tambien son robustas frente a los sesgos potenciales creados por la presencia de reversion a la media y heterogeneidad en las tendencias de renta entre contribuyentes. EnglishWe study how taxable income responds to changes in marginal tax rates, using as a main source of identifying variation three large reforms to the Spanish personal income tax implemented in the period 1999-2014. The most reliable estimates of the elasticity of taxable income (ETI) with respect to the net-of-tax rate for this period are between 0.45 and 0.64. The ETI is about three times larger for selfemployed taxpayers than for employees, and larger for business income than for labor and capital income. The elasticity of broad income (EBI) is smaller, between 0.10 and 0.24, while the elasticity of some tax deductions such as the one for private pension contributions exceeds one. Our estimates are similar across a variety of estimation methods and sample restrictions, and also robust to potential biases created by mean reversion and heterogeneous income trends.

The elasticity of taxable income in Spain: 1999-2014

This paper describes the gender distribution of research fields chosen by the faculty members in the top fifty Economics departments, according to the rankings available on the Econphd.net website. We document that women are unevenly distributed across fields and test some behavioral implications from theories underlying such disparities. Our main findings are that the probability that a woman chooses a given field is positively related to the share of women in that field (path-dependence), and that the share of women in a field at a given department increases with the sizes of the department and field, while it decreases with their average quality. However, these patterns seem to be changing for younger female faculty members. Further, by using Ph.D. cohorts, we document how gender segregation across fields has evolved over the last four decades.

Do Men and Women Economists Choose the Same Research Fields? Evidence from Top 50 Departments

Using administrative tax records for U.K. businesses, we document both bunching in annual turnover below the VAT registration threshold and persistent voluntary registration by almost half of the f...

VAT notches, voluntary registration, and bunching : theory and UK evidence

https://www.econstor.eu/bitstream/10419/171055/1/cesifo1_wp6591.pdf

Miguel Almunia

Papers

Strategic or Confused Firms? Evidence from "Missing" Transactions in Uganda

The elasticity of taxable income in Spain: 1999-2014

Do Men and Women Economists Choose the Same Research Fields? Evidence from Top 50 Departments

VAT notches, voluntary registration, and bunching : theory and UK evidence

More Giving or More Givers? The Effects of Tax Incentives on charitable Donations in the UK