Showing papers on "Golden Rule (fiscal policy) published in 2018"

Intellectual capital research and practice: 7 myths and one golden rule

Abstract: Abstract The intellectual capital research and practice entered in the last years into a visible decline due to some barriers in understanding its intangible nature and designing Newtonian metrics for its measurement and reporting. Inertial thinking is very powerful in promoting new approaches for the need of a new perspective in working with intellectual capital. Unfortunately, even some top journals in the domain of intellectual capital remained trapped into this Newtonian logic and standard statistical analysis, as a result of the mind-set of their editorial staff and reviewers. The purpose of this paper is to present a critical analysis of the intellectual capital research and practice today and to reveal some of the most important barriers in understanding the complexity and nature of the intellectual capital. These barriers manifest like myths in approaching the research into intellectual capital, myths that create a false reality and false research questions, which enter into collision with the real life of companies and their business. The paper identifies seven myths which created a Newtonian version of the non-Newtonian reality, and a golden rule for further research into the intellectual capital of organizations. The conclusion of the present critical analysis is that we need a new approach to understand the complexity of the intellectual capital and new metrics to measure it.

The Optimum Quantity of Capital and Debt

Abstract: In this paper we solve the dynamic optimal Ramsey taxation problem in a model with incomplete markets, where the government commits itself ex-ante to a time path of labor taxes, capital taxes and debt to maximize the discounted sum of agents’ utility starting from today. Whereas the literature has bee limited mainly to studying policies that maximize steady-state welfare only, we instead characterize the optimal policy along the full transition path. We show theoretically that in the long run the capital stock satisfies the modified golden rule. More importantly, we prove that in contrast to complete markets economies, in incomplete markets economies the long run steady-state resulting from an infinite sequence of optimal policy choices is independent of initial conditions. This result is not only of theoretical interest but moreover, enables us to compute the long-run optimum independently from the transition path such that a quantitative analysis becomes tractable. Quantitatively we find, robustly across various calibrations, that in the long run the government debt-to-GDP ratio is high, capital is taxed at a low rate and labor income at a high rate when compared to current U.S. values. Along the optimal transition to the steady state, labor taxes initially are lowered, financed through issuing more debt and taxing capital income heavily, before they are eventually increased to their steady-state level.

The golden rule of longevity

Abstract: How much should society invest in medical care that extends the lives of the older generations? We derive a golden rule for the level of health care expenditures and find that the optimal level of life-extending health care expenditures should increase with rising productivity, increase with the retirement age, and also increase with the population growth rate if a higher growth rate lowers the ratio of retirees to working-age people sufficiently, while the effects of an improvement in medical technology are ambiguous. Moreover, we find that a market economy may be inefficient in terms of the provision of life-extending health care because an individual ignores the effect of his own longevity on the income of others.

Towards a compassionate school. From Golden Rule to Golden Thread

Abstract: Maurice Coles is the CEO of the CoED Foundation, a charity founded in England in 2014, but with international collaborators. The Foundation’s name is compounded from Cohesion, Equality and Diversit...

Returning to the Golden Rule of Balanced Budgets: The Institutional and Political Economy of Restricting Public Deficits and Debt

Abstract: In the aftermath of the 2008 financial crisis, both politicians and public finance economists focused their attention on ways to control public budget deficits and debt. Around the world, detailed and precise regulations affected how governments could deal with public deficit and debt. The “golden rule” of public finance states that governments should borrow only to invest and not to fund current spending, and that the current budget must always balance or show a surplus. Yet implementing the “golden rule” is not a simple question of setting limits to deficits and debt. Using the case of Switzerland, this paper presents the political and institutional economics of budget constraints and develops recommendations for budget management at the subnational government level. How do we balance the needs of current expenditures with intergenerational equity? Does fiscal control over deficit or debt require top-down policies from higher levels of government, or is self-imposed control reasonable?

The Golden Rule: Interfaith Peacemaking and the Charter for Compassion

Abstract: The Charter for Compassion has been signed by over two million people from around the world and partnered with hundreds of interfaith organizations and cities seeking to put into practice the Golde...

Embracing the golden rule of reviewing: A response to the tragedy of the scientific commons

Abstract: Many papers and discussions have identified potential structural or institutional changes to address issues associated with the peer-review process in the information systems field. In this paper, I take an individual-level approach that empowers each of us to do our part to address the tragedy of the scientific commons. My answer to the tragedy of the science commons is simple in concept but challenging in application: the Golden Rule of Reviewing: “Do unto others as you would have reviewer two do unto you”.

The golden rule of morality – an ethical paradox

Abstract: Abstract This paper focuses on the dynamics of ethical perspectives that embody the Golden Rule of Morality. Based on critical analysis of this rule in various cultural and religious contexts, but also from the perspective of humanism, the author presents its paradoxical character, the essence of which is interpreted here in terms of a pointer to metaphysical reality. It turns out that social conditionality, as well as the self-referential concept as a starting point of any ethical reasoning, are serious epistemological challenges for the application of the Golden Rule in the position of universal normativity that this study addresses. On the other hand, Judeo-Christian cosmology and the related basis for ethical foundations is presented here as an inspirational space of ethical reasoning in which the paradoxical character of the Golden Rule becomes rather an indicator of a deeper metaethical interpretation of one's own particular ethical attitudes and outcomes than a practical guide to the discovery of ethical universals.

Policy Forum: A Tax Shift — The Case for Rebalancing the Tax Treatment of Earnings and Housing Wealth

Abstract: This study encourages provincial and/or federal governments to shift the balance of revenue generation to rely proportionately less on taxing earnings in favour of more annual (deferrable) taxation of housing wealth. The author argues that this shift would help to address three concerns: (1) the growing gap between local earnings and home prices; (2) the growth in inequality driven by returns to housing capital; and (3) inequalities that result from violations of the intergenerational golden rule in government budgeting. To support this tax shift, the author suggests design considerations by reflecting on housing wealth surtaxes introduced by the government of British Columbia in 2018 and a "million-dollar homes tax" alternative that he proposes in order to stimulate further discussion.

Valuation for Early-Stage Technology Companies

Abstract: The valuation of early-stage technology companies is challenging due to: the lack of clear operating history; disruptive new business models; a rapidly changing landscape for new entrants; and the unpredictable competitive push-back of powerful incumbent players. Revenue based multiples are standard, but these need to be reconciled with a terminal valuation stuck on profitability. There is a simple method to do this, we call it the "Golden Rule", which embodies simple accounting identities that tie present value via sales uplift over five years to a future profit number struck on net margin. This can be used to square valuations against differing profitability metrics by industry.

Criminological reflections on the Golden Rule and urban stewardship for safety

Abstract: This article seeks further to systematize and develop some ideas from my earlier text “United Nations ‘Earth jurisprudence’, its Golden Rule, the ‘refugee problem’ and urban safety”. In: Kury, H, & Redo, S. Refugees and Migrants in Law and Policy – Challenges and Opportunities for Global Civic Education. Springer: Berlin- Heidelberg- New York (2018). The author thanks Prof. Dr., Dr. h.c. mult. Helmut Kury (Germany), Tamara Mitrofanenko (Consultant, United Nations Environmental Programme, Vienna), and Margaret Shaw (Crime and Social Policy Consulting, Montreal, QC, Canada) for their comments on an earlier draft of this text.

Longevity and companionship in an overlapping-generations model

Abstract: We derive a golden rule for the level of life-extending health care when the utility of the old depends not only their level of consumption but also on the number of old people alive. While previous work has emphasized the negative pecuniary externality from longevity, we derive the effect of the positive non-pecuniary externality of being able to consume with other members of one’s cohort.

The natural interest rate in OLG modelling: A rehabilitation

Abstract: A simple OLG model is used to show that the natural interest rate is superior to the golden rule. This remains valid with public goods, provided these are financed in an appropriate way. In order to preserve the natural interest rate, the so-called helicopter money appears to be more appropriate than the normal credit money. Dynamic inefficiency cannot occur, if either land or neutral (helicopter) money is available as an alternative store of private wealth. Thus, the frequently proposed failure of OLG-models to satisfy the first fundamental theorem of welfare economics does not exist. The paper both generalizes and summarizes some key results from my recent book (van Suntum 2017).

The Tarnished Golden Rule: The Corrosive Effect of Federal Prevailing-Party Standards on State Reciprocal-Fee Statutes

Abstract: It may have been with slight confusion that Asdrubal Alfaro read the foreclosure complaint filed against him in July 2012. An entity completely separate from the one to which he sent his monthly mortgage payments filed this case. So Mr. Alfaro called a longtime friend and attorney to help him save his home. With the representation of his friend, Mr. Alfaro mounted a successful defense. Mr. Alfaro's attorney had noticed that the plaintiff bank, which years ago claimed to have purchased the debt from the original mortgagee, did not have the paperwork necessary to prove that it owned the relevant debt. On the very day that Mr. Alfaro's attorney pressed this standing argument in objection to summary judgment, the plaintiff withdrew its summary judgment motion. Mere days later, the plaintiff withdrew the entire foreclosure action. Having successfully

One Rule to Compensate Them All

Abstract: The article claims that there is a unique compensation criterion that should be applied in all civil wrongs, inter alia, in tort, intellectual property and property law. Where an individual wrongfully infringes the right of another, the taker should be obliged to repay the victim her damages plus half the additional attributed net profits derived from the taking. This article names this criterion the Golden Rule. The suggested criterion contains three main components. If, for example, a firm increased manufacturing with profits of $1,000, acted wrongfully, and as a result, someone suffered damages of $600 — the taker should pay the victim $800 (600 ½(1,000-600)). This rule applies even where the victim suffered only negligible damages. In this case, the taker pays the victim $500 (0 ½(1,000-0)). Lastly, if the firm loses after paying the victim her damages, for example, where the total profits are $400 (before paying the victim’s damages) — the taker pays the victim only her damages ($600). The article examines modern physics for an analogical exploration of the notion of phenomena that are hard to verify, and current laws for any existing application of the Golden Rule. It finds that patent law embraces major aspects of the rule, inter alia, in the US Supreme Court’s influential ruling in eBay Inc. v. MercExchange, L.L.C. that limits the automatic operation of injunctions and emphasizes the importance of the compensation scheme, and especially in reasonable royalty – the most common criterion of patent infringement compensation. The article claims that the reasonable royalty criterion that requires the court to perform “hypothetical bargaining” between the patent infringer and owner is theoretically equivalent to the Golden Rule. The article shows that the Golden Rule is already in use and that it is the unique socially optimal rule of compensation for all civil wrongs. First, using law and economics methodology, the article claims as follows. (1) In bargaining settings, the Golden Rule fully protects the value of the victim’s entitlements by assigning the maximum value to her right to negotiate and sell her entitlement by herself; damages awards eliminate this value. (2) Where under-compensation may be expected, for example, due to asymmetric information, damages awards often lead to inefficient takings, while the Golden Rule ensures that only efficient takings occur. (3) In settings of competitive markets for victim entitlements, damages awards undermine the structure and operation of the markets by allowing potential takers to force a purchase of entitlements at their costs, which the Golden Rule may restore. Finally, (4) the Golden Rule may serve as a proper debiasing mechanism for correcting risks estimation errors caused by cognitive biases. Second, the article claims that normative theories of both corrective and distributive justice lead to the same unique socially optimal Golden Rule compensation criterion. The article further suggests rules to implement the Golden Rule, including ways to measure compensation by this criterion. Inter alia, where takers’ profits or victims’ damages are elusive, the court may use takers’ financial ratios to determine the Golden Rule compensation. Where measuring damages and gains is impractical, the article suggests that the court may apply, mutatis mutandis, its ex-ante equivalent, namely the hypothetical bargaining criterion of patent litigation.

United Nations “Earth Jurisprudence,” Its Golden Rule, the “Refugee Problem,” and Urban Safety

Abstract: The UN calls in its 2016–2030 Sustainable Development Agenda and the “New York Declaration for Refugees and Migrants” to contribute to the strengthening of the national and international response to deal with refugees and migrants humanely and to the mutual satisfaction of host and sending countries (win-win). Accordingly, this essay considers how this “Golden Rule” of reciprocity, which is at the core of “fairness” or “justice,” may so assist in countering some incivilities involving the “refugee problem.” More particularly, this essay explores the ensuing criminological multicultural concerns. It looks into the idea of urban stewardship and women local safety audits in cities of the North with a view to addressing refugee women concerns. This perspective of the Golden Rule understood as an evolutionary or philosophical concept may facilitate addressing some criminological multicultural concerns. The author concludes that the Organization’s faith in and hope for the Agenda and the Declaration, inter alia, depend on a (non)secular education through which the prevention of criminal victimization of women becomes part of a healthy ideology of sustainable development.

Caring for Transgender Patients: Have We Forgotten the Golden Rule?

Abstract: Associate professor and residency director, Department of Emergency Medicine, University of Michigan School of Medicine, Ann Arbor, Michigan; ORCID: http://orcid.org/0000-0003-1745-0836. changing landscape of procedural training at the bedside. Acad Med. 2018;93:699–704. 2 Wang MB, Berke GS, Ward PH, Calcaterra TC, Watts D. Early experience with percutaneous tracheotomy. Laryngoscope. 1992;102:157–162. 3 Steinman MA, Landefeld CS, Baron RB. Industry support of CME—Are we at the tipping point? N Engl J Med. 2012;366: 1069–1071.