Papers by Michael S Michael
Social Science Research Network, 2018
This paper revisits the question of how brain drain affects the optimal education policy of a dev... more This paper revisits the question of how brain drain affects the optimal education policy of a developing economy. Our framework of analysis highlights the complementarity between public spending on education and students' efforts to acquire human capital in response to career opportunities at home and abroad. Given this complementarity, we find that brain drain has conflicting effects on the optimal provision of public education. A positive response is called for when the international earning differential with destination countries is large, and when the emigration rate is relatively low. In contrast with the findings in the existing literature, our numerical experiments show that these required conditions are in fact present in a large number of developing countries; they are equivalent to those under which an increase in emigration induces a net brain gain. As a further contribution, we study the interaction between the optimal immigration policy of the host country and education policy of the source country in a game-theoretic framework.
Royal Economic Society Annual Conference 2002, 2002
We construct a two-country model where pollution from production is transmitted across borders. P... more We construct a two-country model where pollution from production is transmitted across borders. Pollution abatement is undertaken sequentially by private producers and the public sector. We characterize the Nash optimal levels of the policy instruments in the two countries: emission taxes and funds allocated for public abatement activities. We examine the implications of a number of multilateral policy reforms. One of our findings is that the magnitude of the beneficial effect of a reform depends on the scope of the reform, and if it is restricted to a subset of policy instruments, then the efficacy of environmental policy reform can be greatly undermined.
Social Science Research Network, 2002
An important issue in public policy debates is the effect of international migration on welfare i... more An important issue in public policy debates is the effect of international migration on welfare in source and host countries. We address this issue by constructing a general equilibrium model of a two-class source or host country. Each country produces many traded and non-traded goods, uses income taxes and distributes the tax receipts equally to all individuals. The analysis examines the effects of permanent migration on class, and national welfare. We show, among other things, that marginal immigration hurts people already in the country regardless of whether or not non-traded goods exist. The presence of international capital mobility, however, may reverse the above result. JEL Classification: F22.
CESifo Economic Studies, 2015
This article examines the problem facing an advanced, final-destination country as it seeks coope... more This article examines the problem facing an advanced, final-destination country as it seeks cooperation from its less-well-off neighbors to impede unauthorized, third-country migrants from transiting their territories. With that aim, it transfers aid to the transit countries in support of their border-control efforts. Aid recipients, however, may have an incentive to divert resources to border security objectives other than immigration control. We characterize the donor’s optimal allocation of aid between the transit countries and the optimal use of aid by the latter in the Nash equilibrium. These values of the policy instruments are subsequently compared with those in an equilibrium where the transit countries (i) compete for a share of aid, (ii) collude to maximize joint welfare, and (iii) follow the donor who moves first. (JEL codes: F22).
Social Science Research Network, 2002
We construct a two-country model where pollution from production is transmitted across borders. P... more We construct a two-country model where pollution from production is transmitted across borders. Pollution abatement is undertaken sequentially by private producers and the public sector. We characterize the Nash optimal levels of the policy instruments in the two countries: emission taxes and funds allocated for public abatement activities. We examine the implications of a number of multilateral policy reforms. One of our findings is that the magnitude of the beneficial effect of a reform depends on the scope of the reform, and if it is restricted to a subset of policy instruments, then the efficacy of environmental policy reform can be greatly undermined.
Keio economic studies, 1992
This paper reexamines the traditional results of customs union theory in a model where labor supp... more This paper reexamines the traditional results of customs union theory in a model where labor supply is variable and wages are taxed. In the absence of wage taxes, trade creation improves welfare while trade diversion may or may not. When the imported good is labor intensive and a complement to leisure in consumption, then variable labor supply increases the welfare gains from trade creation. In the presence of wage taxes, trade creation and trade diversion have ambiguous welfare effects. In this case, the paper identifies conditions under which welfare improves or deteriorates as a result of a trade creating or a trade diverting customs union.
Social Science Research Network, Sep 2, 2005
We construct a two-country model where pollution from production is transmitted across borders. P... more We construct a two-country model where pollution from production is transmitted across borders. Pollution abatement is undertaken sequentially by private producers and the public sector. We characterize the Nash optimal levels of the policy instruments in the two countries: emission taxes and funds allocated for public abatement activities. We examine the implications of a number of multilateral policy reforms. One of our findings is that the magnitude of the beneficial effect of a reform depends on the scope of the reform, and if it is restricted to a subset of policy instruments, then the efficacy of environmental policy reform can be greatly undermined.
RePEc: Research Papers in Economics, Dec 17, 2018
Social Science Research Network, 2002
We construct a two-country model where pollution from production is transmitted across borders. P... more We construct a two-country model where pollution from production is transmitted across borders. Pollution abatement is undertaken sequentially by private producers and the public sector. We characterize the Nash optimal levels of the policy instruments in the two countries: emission taxes and funds allocated for public abatement activities. We examine the implications of a number of multilateral policy reforms. One of our findings is that the magnitude of the beneficial effect of a reform depends on the scope of the reform, and if it is restricted to a subset of policy instruments, then the efficacy of environmental policy reform can be greatly undermined.
CESifo Economic Studies, Aug 6, 2019
Within a model of variable supply of capital due to international mobility and variable labor sup... more Within a model of variable supply of capital due to international mobility and variable labor supply due to endogenous labor-leisure choice, we revisit the issues of vertical fiscal externalities, and of federal tax-transfers. Capital and labor taxes by federal and state governments finance the provision of federal and of state public consumption goods. When capital and labor are substitutes in production, we show that (i) the state’s optimal policy calls for capital and labor taxes, (ii) the vertical fiscal externality can be reversed from negative, implying inefficiently high noncooperative capital taxes, to positive, implying inefficiently low noncooperative capital taxes, and (iii) under centralized leadership the federal government replicates the second best optimum with a capital tax, and possibly, top-down transfers. (JEL codes: F18, F21, H21).
Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.
The Japanese Economic Review, Sep 1, 1995
Within models of traded and nontraded goods, that ignore international factor mobility, the liter... more Within models of traded and nontraded goods, that ignore international factor mobility, the literature on tariff reform has established sufficient conditions under which a policy that reduces (increases) the highest (lowest) tariff to the level of the second highest (lowest) rate, or a policy that moves proportionally all tariffs to a given number improves welfare. The present paper generalizes previous studies by introducing perfect international capital mobility. It demonstrates that if all goods are normal in consumption and the nontraded good markets are locally Walras stable, then a reform policy that reduces (increases) the highest (lowest) tariff to the level of the next highest (Lowest) rate improves welfare if (i) the good with the highest (lowest) tariff rate is a net substitute to all other traded goods, and (ii) the nontraded goods are net substitutes to all other goods. Second, a policy reform that moves all tariffs to a given number is always welfare improving. * We acknowledge constructive comments by a referee of the journal, D. Heffley, and S. Miller. The usual caveat applies.-274-0 Japan Association of Economics and Econometrics 1995.
Social Science Research Network, 2001
We construct a general equilibrium trade model of a two-class small open host or source country. ... more We construct a general equilibrium trade model of a two-class small open host or source country. When consumption tax revenue finances the provision of a public good, marginal migration reduces social welfare in the source country and raises it in the host. When consumption tax revenue is equally distributed among domestic households in each country, then migration has an ambiguous impact on social welfare in either country. When tariff revenue in either country is either equally distributed among domestic households, or it is used to finance the provision of a public good, then migration has an ambiguous effect on social welfare in the host country, and is expected to reduce social welfare in the source.
Social Science Research Network, 2001
We develop a North-South model of foreign aid and cross-border pollution resulting from productio... more We develop a North-South model of foreign aid and cross-border pollution resulting from production activities in the recipient country. There is both private and public abatement of pollution, the latter being financed through emissions tax revenue and foreign aid. We characterise a Nash equilibrium where the donor country chooses the amount of aid, and the recipient chooses the fraction of aid allocated to pollution abatement and/or the emission tax rate. At this equilibrium, an increase in the donor's perceived rate of cross-border pollution reduces net emission levels.
SSRN Electronic Journal, 2014
We study the interaction between the optimal immigration policy of a host country and education p... more We study the interaction between the optimal immigration policy of a host country and education policy of a source country in a model of international migration where acquisition of human capital by agents is driven by the academic and career opportunities at home and abroad. Greater opportunities to migrate are found to increase the source country's net stock of human capital only under stringent conditions concerning the shape of the utility function of students and of the production function for human capital, the international wage dierential, and the country's emigration rate.
This paper investigates the welfare consequences of immigration policies in a model with two type... more This paper investigates the welfare consequences of immigration policies in a model with two types of labour, skilled and unskilled and international capital mobility. Within the small country case, the paper examines the effect of government policies, which change the immigration cost, on the welfare of natives. It is shown, among other things, that a decrease in the immigration cost of skilled labour, which is a net fiscal contributor, may decrease the welfare of natives if unskilled labour is general equilibrium complement with skilled labour and capital while skilled labour and capital are general equilibrium substitutes. Within the case of two large countries in the labour market, the paper identifies conditions under which changes in the immigration policies of one country improve the welfare of natives and the world.
We construct a two-country model where pollution from production is transmitted across borders. P... more We construct a two-country model where pollution from production is transmitted across borders. Pollution abatement is undertaken sequentially by private producers and the public sector. We characterize the Nash optimal levels of the policy instru-ments in the two countries: emission taxes and funds allocated for public abatement activities. We examine the implications of a number of multilateral policy reforms. One of our findings is that the magnitude of the beneficial effect of a reform depends on the scope of the reform, and if it is restricted to a subset of policy instruments, then the efficacy of environmental policy reform can be greatly undermined.
We consider a two-good, two small open economies model with crossborder pollution that is generat... more We consider a two-good, two small open economies model with crossborder pollution that is generated from consumption. Within this framework we examine i) the Nash-equilibrium consumptions taxes and compare them to the case where pollution is only local, ii) the cooperative equilibrium consumption taxes and we compare them to the Nash tax rates, and iii) cases where cooperative taxes are different between countries. Many results of the paper depend on wheather pollution and the polluting good are complements or substitutes in consumption.
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Papers by Michael S Michael