Laura Marsiliani - Academia.edu (original) (raw)

Papers by Laura Marsiliani

Theoretical economics letters, 2024

We investigate the optimum lending arrangements when there is the possibility of partial default,... more We investigate the optimum lending arrangements when there is the possibility of partial default, in addition to full default when physical capital is unobservable. In a model calibrated on Argentina, we find an optimal debt reduction of 39%, and optimal re-entry probability of 0.10. Full default is more likely when total factor productivity is very low, and either debt is low or very high. Partial default is more likely when debt is moderate. Monte Carlo simulations under the optimum lending arrangements indicate the economy spends 47.90% of the time in partial default, translating into an average partial default probability of 9.12%. This is quantitatively close to what emerging economies have experienced, thus suggesting that current arrangements are close to optimal. In fact, if there is a competitive market for borrowers, we would expect risk-neutral lenders to offer schemes giving higher utility to the borrower, and thus the competitive market should converge to the optimal scheme.

RePEc: Research Papers in Economics, 1999

and it is a condition of accessing publications that users recognise and abide by the legal requi... more and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.-Users may download and print one copy of any publication from the public portal for the purpose of private study or research-You may not further distribute the material or use it for any profit-making activity or commercial gain-You may freely distribute the URL identifying the publication in the public portal Take down policy If you believe that this document breaches copyright, please contact us providing details, and we will remove access to the work immediately and investigate your claim.

Social Science Research Network, 2000

We analyze the impact of micro-founded political institutions on economic growth in an overlappin... more We analyze the impact of micro-founded political institutions on economic growth in an overlappinggenerations economy, where individuals differ in preferences over a public good (as well as in age). Labour-and capital taxes finance the public good and a public input. The benchmark institution is a parliament, where all decisions are taken. Party entry, parliamentary composition, coalition formation, and bargaining are endogenous. We compare this constitution to separation of powers, where a spending minister (elected in parliament or appointed by the largest party). Separation of powers tend to yield lower growth, mainly due to the occurrence of production inefficiency.

Other publications TiSEM, 2000

We analyze how, in representative democracies, income distribution influences the stringency of e... more We analyze how, in representative democracies, income distribution influences the stringency of environmental policy and economic growth. Individuals (who differ in abilities) live for two periods, working when young and owning capital when old. Externalities are caused by a polluting factor. The revenue from pollution taxation, as well as capital-income taxation, is redistributed lump-sum to the old. The fiscal decision, at each point in time, is taken by a majority elected representative. In politico-economic equilibrium, more inequality (in terms of the skewness of the distribution) yields a lower pollution tax, a larger capital tax, and lower growth.

RePEc: Research Papers in Economics, 2003

This paper explores the relationship between environmental protection and international capital m... more This paper explores the relationship between environmental protection and international capital movements, when tax policy is endogenous (through voting). A two-period general equilibrium model of a small open economy is specified to compare the effects of two different constitutions (commitment or no commitment in tax policy), as well as income inequality. Under the commitment regime, the equilibrium is characterised by a lower labour tax, higher environmental tax and less capital moving abroad than in the no-commitment equilibrium. Furthermore, given the degree of commitment, more equal societies are characterised by tougher environmental policy and less capital moving abroad.

International Journal of Hydrogen Energy

The Bangladesh Development Studies

This paper investigates how the removal of fossil fuel subsidy affects the welfare of a small, oi... more This paper investigates how the removal of fossil fuel subsidy affects the welfare of a small, oil-importing country like Bangladesh. In doing so, an energy augmented Dynamic Stochastic General Equilibrium (DSGE) model is developed. The model is calibrated and simulated for the Bangladesh economy under three scenarios, and the results reveal that a 10 per cent reduction in fossil fuel subsidy results in an overall increase in household welfare by 0.36 per cent. However, complete removal of fossil fuel subsidy would increase welfare by 1.89 per cent. The results also show that the subsidy removal schemes improve the country’s fiscal burden. We highlight the fact that fossil fuel subsidy acts as a barrier to the development of renewable energy technologies in Bangladesh which can play a significant role in promoting the country's future energy security. So, the paper suggests that the government should use the revenue earned from the fuel subsidy removal to offer incentives to new...

The Handbook of Energy Policy, 2022

Captive power plants (CPPs) in many emerging and developing countries play a significant role in ... more Captive power plants (CPPs) in many emerging and developing countries play a significant role in the electricity sector. This is mainly due to unreliable electricity supplies from stateowned utilities and challenges in accessing the national grid, especially in remote and rural areas. Integrating the captive capacity with the on-grid supply can improve resource utilization in the electricity market. In this study, we focus on the role of CPPs in Bangladesh. We start by providing recent stylized facts and survey the experience of other countries. We then use a dynamic stochastic general equilibrium (DSGE) model to examine the effects of allowing CPPs to sell their excess output to the national grid at regulated prices. We find that opening the grid to CPPs would reduce the industrial output and GDP due to pre-existing energy price distortions. We also show that the Bangladesh economy would become more vulnerable to oil price shocks if CPPs were connected to the national grid. We conclude that the government should not open the grid to CPPs yet. Instead, it should first consider alternative reforms, such as taking steps to reduce the price distortions and enabling a competitive market environment.

This paper contributes to the literature on sovereign debt default by modelling imperfect informa... more This paper contributes to the literature on sovereign debt default by modelling imperfect information about borrowers’ physical capital in the strategic decision-making process between borrowers and lenders. When only limited information about a borrower’s capital investment is available, lenders estimate the default probability of sovereign borrowers from current output and the amount selected for debt. Borrowers will make decisions on consumption and investment, strategically, with an option to default. We calibrate our model to the Argentine economy and simulate the effect of productivity shocks between 1980 Q1 and 2017 Q4. We compute the dynamics of equilibrium bond prices, unobservable physical capital, debt and consumption in addition to equilibrium default when the lender has limited information about the borrower’s capital. As capital is unobservable we show that borrowing for consumption can be optimal under certain circumstances. This is a novel result as previous literatu...

This paper is a shorter revised version of our CentER Discussion Paper 34/2000 with the same titl... more This paper is a shorter revised version of our CentER Discussion Paper 34/2000 with the same title. We wish to thank Massimo Bordignon, Shelby Gerking, Gerhard Glomm, Chris Heady, Chuan-Zhong Li, John List, Huw Lloyd-Ellis, Sjak Smulders, conference participants at the 55 International Institute of Public Finance (IIPF) Annual Conference, Moscow; the 14 Annual Congress of the European Economic Association, Santiago de Compostela; the 10 Annual Conference of the European Association of Environmental and Resource Economists, Rethymno; and seminars participants at the Institute for Fiscal Studies, London, the University of Wyoming, Michigan State University, and University of Rochester for very useful comments on earlier drafts. Laura Marsiliani gratefully acknowledges financial support from the Dutch Scientific Organisation, NWO. All errors and shortcomings are our own

Link to publication Citation for published version (APA): Marsiliani, L., & Renstrom, T. I. (1999... more Link to publication Citation for published version (APA): Marsiliani, L., & Renstrom, T. I. (1999). Time inconsistency in environmental policy: Tax earmarking as a commitment solution. (CentER Discussion Paper; Vol. 1999-86). CentER. General rights Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research • You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal Take down policy If you believe that this document breaches copyright, please contact us providing details, and we will remove access to the work immedi...

We derive conditions on individual preferences and technology that give rise to a negative correl... more We derive conditions on individual preferences and technology that give rise to a negative correlation between income inequality and environmental protection. We present a class of models (which captures a static model as well as an overlapping-generations model) in which individuals differ in earning abilities, and where a majority elected representative takes decisions over a pollution tax and a redistributive tax. We show that, if private consumption goods and the environment are non-inferior goods, then if the decisive individual has lower ability than the average, she will prefer a higher redistributive tax and a lower pollution tax.

We analyze the consequences on social security of immigration in a micro founded parliamentary de... more We analyze the consequences on social security of immigration in a micro founded parliamentary democracy. The underlying economic model is an overlapping-generations economy, where individuals differ in preferences over a public good (as well as in age). Social security, as well as the public good is funded by labour- and capital taxes. We find that in an economy with positive population growth, immigration increases the social security payment (per old). On the contrary, an economy with (small) population decline will experience a decline in social security if immigration is large enough. The reason is that immigration in the latter case alters the political majority.