Three essay on the sectoral aspects of economic policy
(2016)
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- Abstract
- In this dissertation, I study the implications of policies with heterogeneous sectoral impacts in three research fields of macroeconomics: (i) environmental policy, (ii) foreign aid and (iii) the political economy of the twin deficits. In the first chapter, the distributional impact of a pollution tax is studied by considering a society in which wealth is distributed heterogeneously among households. We present a model in which firms can use dirty and clean technologies. If the dirty technology is capital intensive, pollution tax leads to a reallocation of production factors towards the clean technology, changing the factor prices in favor of workers. Hence, richer people, owning a larger share of capital, support less the pollution tax. In the second chapter, I study the macroeconomic impacts of foreign aid. I consider two sectors: tradable (T-sector) and non-tradable sector (N-sector). I consider two forms of aid: (i) aid which is transferred to households and (ii) aid which is used to finance public investment. I investigate the impact of the liberalization of capital market on the optimal form and on the performance of foreign aid. In the third chapter, I study the impact of wage centralization on the political economy of the twin deficits. Econometric analysis of the paper finds evidence that wage centralization, in a cross-section of industrialized economies, is significantly associated with lower deficits in current account and budget balance. This chapter provides a political economy framework to explain this empirical finding.
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Arabzadeh, H. (2016). Three essay on the sectoral aspects of economic policy. https://hdl.handle.net/2078.5/181530