Alfons Weichenrieder | Goethe-Universität Frankfurt am Main (original) (raw)
Papers by Alfons Weichenrieder
There is a large, but yet growing debate about the need to complement the European monetary union... more There is a large, but yet growing debate about the need to complement the European monetary union with a stronger fiscal union. This paper reviews the potential trade-offs between effectiveness, moral hazard problems, and permanent redistribution. In particular, we contribute to the question of how member states may be willing to enter into a stronger fiscal union if the evolution of this union may imply large redistribution under incomplete contracting. We discuss clawback mechanisms that have been suggested in the literature, but conclude that clawbacks are undesirable, as they would essentially destroy the insurance value of a fiscal union. Instead, we propose that a clearly defined exit option as a guarantee against involuntary redistribution can make entry into a stronger fiscal union less risky and hence more attractive for member states.
JEL Classification: H500, H600 ∗Shafik Hebous: Goethe University Frankfurt and CESifo, hebous@wiw... more JEL Classification: H500, H600 ∗Shafik Hebous: Goethe University Frankfurt and CESifo, hebous@wiwi.uni-frankfurt.de. Alfons J. Weichenrieder: Goethe University Frankfurt, SAFE, WU Vienna, and CESifo, a.weichenrieder@em.unifrankfurt.de. This paper is part of the research program of the Center “Sustainable Architecture for Finance in Europe” (S A F E). Project funding (#2014-11531) is gratefully acknowledged.
Digitalization expands the possibility for corporations to reduce taxes, mainly, but not exclusiv... more Digitalization expands the possibility for corporations to reduce taxes, mainly, but not exclusively, by allowing improved planning where profits can be shifted. Against this background, the European Commission and several countries emphatically demand and design new tax instruments. However, a selective turning away from internationally accepted principles of international taxation will bring up more questions than solutions. While there are good reasons to think about a fundamental regime switch in international corporate taxation, there are also good arguments for not turning to ad hoc measures that selectively target the relatively small market of Google and Facebook and raise only negligible tax revenues.
Focusing on the change in pollution, consumption and extraction cost paths, we build a multi-peri... more Focusing on the change in pollution, consumption and extraction cost paths, we build a multi-period model that allows us to assess whether oil windfalls may be globally welfare-enhancing. The assessment depends on the quality of the discovered resource, expressed as the extraction cost. Our findings suggest that even when faced with high environmental externalities and no internalization mechanism for them, new oil finds can be conducive to welfare.
Seit 2006 konnen die Bundeslander den Steuersatz der Grunderwerbsteuer frei wahlen. Dies hat zu e... more Seit 2006 konnen die Bundeslander den Steuersatz der Grunderwerbsteuer frei wahlen. Dies hat zu einer starken Erhohung der Steuersatze in den meisten Bundeslandern und somit zu einer Verteuerung des Eigentumerwerbs sowie einer Erschwerung der Bildung von Wohneigentum gefuhrt. Zudem werden bei Verkaufen groser Immobilien oft verschiedene Gestaltungsmodelle – sogenannte Share Deals – genutzt, um die Zahlung der Grunderwerbsteuer zu umgehen. Ist eine Reform uberfallig? Jens Boysen-Hogrefe, Institut fur Weltwirtschaft, Kiel, schlagt vor, bei der Grunderwerbsteuer die »halbherzige Steuerautonomie der Lander« ruckabzuwickeln und einen bundeseinheitlichen Steuersatz, der merklich unter dem aktuellen Landerdurchschnitt liegt und keine Ausnahmen vorsieht, einzufuhren. So konnten unter anderem auch den Steuervermeidungsmoglichkeiten durch Share Deals entgegengewirkt werden. Wolfgang Scherf und Carolin Dresselhaus, Universitat Giesen, halten fest, dass die Grunderwerbsteuer weder durch fundam...
SSRN Electronic Journal, 1999
ABSTRACT This paper considers the efficiency of a contestable natural monopoly if consumers are h... more ABSTRACT This paper considers the efficiency of a contestable natural monopoly if consumers are heterogeneous and the monopolist can differentiate prices imperfectly. With restricted ent ry, the standard result in this case is that the monopoly offers a menu of price-quantity combinations which leads to the well-known 'no-distortion-at-the-top` pricing. Low demand consumers are induced to consume less than their first-best quantity, while high demand consumers buy a quantity where their marginal willingness to pay equals marginal cost. The paper shows that this type of inefficiency may also appear in a contestable market. Depending on cost and demand structures, first best efficiency can al so be a sustainable equilibrium. However, due to the existence of a continuum of equilibria, first best efficiency is never guaranteed. Most notably, even a stable 'distortion-at-the-top' result is possible.
SSRN Electronic Journal, 2005
SSRN Electronic Journal, 2017
Environmental and Resource Economics, 2021
Strict environmental regulation may deter foreign direct investment (FDI). The paper develops the... more Strict environmental regulation may deter foreign direct investment (FDI). The paper develops the hypothesis that regulation predominantly discourages FDI that is conducted as Greenfield investment rather than mergers and acquisitions (M&A). The hypothesis is tested with German firm-level FDI data. Empirically, stricter regulation reduces new Greenfield projects in polluting industries, but indeed has a much smaller impact on the number of M&As. This significant difference is compatible with the fact that existing operations often benefit from grandfathering rules, which provide softer regulation for pre-exisiting plants, and with the expectation that for M&As part of the regulation is capitalized in the purchase price. The heterogeneous effects help explaining mixed results in previous studies that have neglected the mode of entry.
Perspektiven der Wirtschaftspolitik, 2020
ZusammenfassungJohannes Kasinger, Lukas Nöh und Alfons Weichenrieder nehmen die derzeitige Niedri... more ZusammenfassungJohannes Kasinger, Lukas Nöh und Alfons Weichenrieder nehmen die derzeitige Niedrigzinsphase und die Debatte um den Einsatz von Zinsswaps in Hessen zum Anlass, die Fristigkeitsstruktur der Staatsschulden sowie den Einsatz von langfristigen Zinsswaps zu erörtern. Die Autoren betonen, dass im Gegensatz zu einem privaten Bauherrn der Staat nicht für sich wirtschaftet, sondern als Sachwalter der Steuerzahler agieren sollte. Den Zinserhöhungsrisiken des Staates stehen Zinserhöhungschancen der Steuerzahler in deren Funktion als Kreditgeber gegenüber. Letzteres schwächt das Argument für langfristige Verschuldung, sei es durch die Emission langfristiger Anleihen oder durch den Einsatz von Finanzderivaten. Grundsätzlich kann eine Glättung der Zinslast allerdings dabei helfen, die für den Schuldendienst notwendigen Steuern zu glätten und die Zusatzlast der Besteuerung zu mindern.
SSRN Electronic Journal, 2018
This paper studies the distributional consequences of a systematic variation in expenditure share... more This paper studies the distributional consequences of a systematic variation in expenditure shares and prices. By using European Union Household Budget Surveys and Harmonized Index of Consumer Prices data, we construct household-specific price indices and reveal the existence of a pro-rich inflation in Europe. Particularly, over the period 2001-15, the consumption bundles of the poorest deciles in 25 European countries have on average become 10.5 percentage points more expensive than those of the richest decile. We find that ignoring the differential inflation across the distribution underestimates the change in the Gini (based on consumption expenditure) by up to 0.03 points. Crosscountry heterogeneity in this change is large enough to affect the ranking of the countries in inequality measures.
Empirica, 2019
A major goal of the EU Commission in the area of direct taxation is the introduction of a common ... more A major goal of the EU Commission in the area of direct taxation is the introduction of a common consolidated corporate tax base (CCCTB) in Europe. While hardly discussed in the literature, such a system would limit national discretion over tax depreciation. In a sample of up to 47 countries, we find that the probability of a tax reform that improves the depreciation allowances increases, if the macroeconomic situation is weak. This suggests that changes in depreciation allowances are used as a fiscal instrument for stabilization. A common consolidated tax base deprives national governments from implementing investment incentives via accelerated depreciation. This paper discusses the possible implementation of a hybrid system that combines features of formula apportionment and separate accounting. Such a hybrid system may substantially mitigate transfer pricing problems and other tax planning issues, whilst preserving national discretion over depreciation allowances.
SSRN Electronic Journal, 2018
CESifo Economic Studies, 2016
There is a large, yet growing debate about the need to complement the European monetary union wit... more There is a large, yet growing debate about the need to complement the European monetary union with a stronger fiscal union. This article reviews the potential trade-offs between effectiveness, moral hazard problems, and permanent redistribution. Addressing the counter-arguments against a tighter fiscal union is essential to overcome the political reluctance in some member states that are concerned about large amounts of redistribution. We discuss clawback mechanisms that have been suggested in the literature as a measure to limit redistribution, but conclude that clawbacks are undesirable, as they would essentially destroy the insurance value of a fiscal union. Instead, we propose that a clearly defined exit option as a guarantee against involuntary redistribution can make entry into a stronger fiscal union less risky and hence more attractive for member states.
Das ursprungliche Ziel des Erneuerbare-Energien-Gesetz war die Verringerung der Emissionen. Eigen... more Das ursprungliche Ziel des Erneuerbare-Energien-Gesetz war die Verringerung der Emissionen. Eigentlich hat die Politik bereits ein Instrument an der Hand, das dieses Ziel fokussiert und kostensparend erreichen kann: den Handel mit CO2-Zertifikaten. Der Autor argumentiert, dass das Nebeneinander von CO2-Handel und EEG hochst unproduktiv ist und schleunigst beendet werden sollte. Ein plausibleres Argument fur den politischen Erfolg des EEG und das derzeitige Herumdoktern im Detail ist, dass die Politik mit dem EEG Industriepolitik betreiben und die Kosten auf zukunftige Parlamente und Generationen uberwalzen kann.
SSRN Electronic Journal, 2015
There is a growing debate about complementing the European Monetary Union by a more comprehensive... more There is a growing debate about complementing the European Monetary Union by a more comprehensive fiscal union. Against this background, this paper emphasizes that there is a trade-off in designing a system of fiscal transfers ("fiscal capacity") in a union between members of different size. A system cannot guarantee symmetric treatment of members and simultaneously ensure a balanced budget. We compute hypothetical transfers for the Eurozone members from 2001 to 2012 to illustrate this trade-off. Interestingly, a symmetric system that treats shocks in small and large countries symmetrically would have produced large budgetary surpluses in 2009, the worst year of the financial crisis.
The paper discusses whether a Pareto-improving cut back of a pay-as-you-go (PAYGO) system of soci... more The paper discusses whether a Pareto-improving cut back of a pay-as-you-go (PAYGO) system of social security is feasible if there is an altruistic motive for making positive bequests. The paper argues that this cut back is possible if the PAYGO system relies on distorting labor taxes. Even in the case when only a fraction of the current old have an altruistic bequest motive it may be possible to carry out such an improvement. In this case a Pareto-improving cut back of the social security system has to be complemented by an intra-generational redistribution from individuals with children to those without kids.
There is a large, but yet growing debate about the need to complement the European monetary union... more There is a large, but yet growing debate about the need to complement the European monetary union with a stronger fiscal union. This paper reviews the potential trade-offs between effectiveness, moral hazard problems, and permanent redistribution. In particular, we contribute to the question of how member states may be willing to enter into a stronger fiscal union if the evolution of this union may imply large redistribution under incomplete contracting. We discuss clawback mechanisms that have been suggested in the literature, but conclude that clawbacks are undesirable, as they would essentially destroy the insurance value of a fiscal union. Instead, we propose that a clearly defined exit option as a guarantee against involuntary redistribution can make entry into a stronger fiscal union less risky and hence more attractive for member states.
JEL Classification: H500, H600 ∗Shafik Hebous: Goethe University Frankfurt and CESifo, hebous@wiw... more JEL Classification: H500, H600 ∗Shafik Hebous: Goethe University Frankfurt and CESifo, hebous@wiwi.uni-frankfurt.de. Alfons J. Weichenrieder: Goethe University Frankfurt, SAFE, WU Vienna, and CESifo, a.weichenrieder@em.unifrankfurt.de. This paper is part of the research program of the Center “Sustainable Architecture for Finance in Europe” (S A F E). Project funding (#2014-11531) is gratefully acknowledged.
Digitalization expands the possibility for corporations to reduce taxes, mainly, but not exclusiv... more Digitalization expands the possibility for corporations to reduce taxes, mainly, but not exclusively, by allowing improved planning where profits can be shifted. Against this background, the European Commission and several countries emphatically demand and design new tax instruments. However, a selective turning away from internationally accepted principles of international taxation will bring up more questions than solutions. While there are good reasons to think about a fundamental regime switch in international corporate taxation, there are also good arguments for not turning to ad hoc measures that selectively target the relatively small market of Google and Facebook and raise only negligible tax revenues.
Focusing on the change in pollution, consumption and extraction cost paths, we build a multi-peri... more Focusing on the change in pollution, consumption and extraction cost paths, we build a multi-period model that allows us to assess whether oil windfalls may be globally welfare-enhancing. The assessment depends on the quality of the discovered resource, expressed as the extraction cost. Our findings suggest that even when faced with high environmental externalities and no internalization mechanism for them, new oil finds can be conducive to welfare.
Seit 2006 konnen die Bundeslander den Steuersatz der Grunderwerbsteuer frei wahlen. Dies hat zu e... more Seit 2006 konnen die Bundeslander den Steuersatz der Grunderwerbsteuer frei wahlen. Dies hat zu einer starken Erhohung der Steuersatze in den meisten Bundeslandern und somit zu einer Verteuerung des Eigentumerwerbs sowie einer Erschwerung der Bildung von Wohneigentum gefuhrt. Zudem werden bei Verkaufen groser Immobilien oft verschiedene Gestaltungsmodelle – sogenannte Share Deals – genutzt, um die Zahlung der Grunderwerbsteuer zu umgehen. Ist eine Reform uberfallig? Jens Boysen-Hogrefe, Institut fur Weltwirtschaft, Kiel, schlagt vor, bei der Grunderwerbsteuer die »halbherzige Steuerautonomie der Lander« ruckabzuwickeln und einen bundeseinheitlichen Steuersatz, der merklich unter dem aktuellen Landerdurchschnitt liegt und keine Ausnahmen vorsieht, einzufuhren. So konnten unter anderem auch den Steuervermeidungsmoglichkeiten durch Share Deals entgegengewirkt werden. Wolfgang Scherf und Carolin Dresselhaus, Universitat Giesen, halten fest, dass die Grunderwerbsteuer weder durch fundam...
SSRN Electronic Journal, 1999
ABSTRACT This paper considers the efficiency of a contestable natural monopoly if consumers are h... more ABSTRACT This paper considers the efficiency of a contestable natural monopoly if consumers are heterogeneous and the monopolist can differentiate prices imperfectly. With restricted ent ry, the standard result in this case is that the monopoly offers a menu of price-quantity combinations which leads to the well-known 'no-distortion-at-the-top` pricing. Low demand consumers are induced to consume less than their first-best quantity, while high demand consumers buy a quantity where their marginal willingness to pay equals marginal cost. The paper shows that this type of inefficiency may also appear in a contestable market. Depending on cost and demand structures, first best efficiency can al so be a sustainable equilibrium. However, due to the existence of a continuum of equilibria, first best efficiency is never guaranteed. Most notably, even a stable 'distortion-at-the-top' result is possible.
SSRN Electronic Journal, 2005
SSRN Electronic Journal, 2017
Environmental and Resource Economics, 2021
Strict environmental regulation may deter foreign direct investment (FDI). The paper develops the... more Strict environmental regulation may deter foreign direct investment (FDI). The paper develops the hypothesis that regulation predominantly discourages FDI that is conducted as Greenfield investment rather than mergers and acquisitions (M&A). The hypothesis is tested with German firm-level FDI data. Empirically, stricter regulation reduces new Greenfield projects in polluting industries, but indeed has a much smaller impact on the number of M&As. This significant difference is compatible with the fact that existing operations often benefit from grandfathering rules, which provide softer regulation for pre-exisiting plants, and with the expectation that for M&As part of the regulation is capitalized in the purchase price. The heterogeneous effects help explaining mixed results in previous studies that have neglected the mode of entry.
Perspektiven der Wirtschaftspolitik, 2020
ZusammenfassungJohannes Kasinger, Lukas Nöh und Alfons Weichenrieder nehmen die derzeitige Niedri... more ZusammenfassungJohannes Kasinger, Lukas Nöh und Alfons Weichenrieder nehmen die derzeitige Niedrigzinsphase und die Debatte um den Einsatz von Zinsswaps in Hessen zum Anlass, die Fristigkeitsstruktur der Staatsschulden sowie den Einsatz von langfristigen Zinsswaps zu erörtern. Die Autoren betonen, dass im Gegensatz zu einem privaten Bauherrn der Staat nicht für sich wirtschaftet, sondern als Sachwalter der Steuerzahler agieren sollte. Den Zinserhöhungsrisiken des Staates stehen Zinserhöhungschancen der Steuerzahler in deren Funktion als Kreditgeber gegenüber. Letzteres schwächt das Argument für langfristige Verschuldung, sei es durch die Emission langfristiger Anleihen oder durch den Einsatz von Finanzderivaten. Grundsätzlich kann eine Glättung der Zinslast allerdings dabei helfen, die für den Schuldendienst notwendigen Steuern zu glätten und die Zusatzlast der Besteuerung zu mindern.
SSRN Electronic Journal, 2018
This paper studies the distributional consequences of a systematic variation in expenditure share... more This paper studies the distributional consequences of a systematic variation in expenditure shares and prices. By using European Union Household Budget Surveys and Harmonized Index of Consumer Prices data, we construct household-specific price indices and reveal the existence of a pro-rich inflation in Europe. Particularly, over the period 2001-15, the consumption bundles of the poorest deciles in 25 European countries have on average become 10.5 percentage points more expensive than those of the richest decile. We find that ignoring the differential inflation across the distribution underestimates the change in the Gini (based on consumption expenditure) by up to 0.03 points. Crosscountry heterogeneity in this change is large enough to affect the ranking of the countries in inequality measures.
Empirica, 2019
A major goal of the EU Commission in the area of direct taxation is the introduction of a common ... more A major goal of the EU Commission in the area of direct taxation is the introduction of a common consolidated corporate tax base (CCCTB) in Europe. While hardly discussed in the literature, such a system would limit national discretion over tax depreciation. In a sample of up to 47 countries, we find that the probability of a tax reform that improves the depreciation allowances increases, if the macroeconomic situation is weak. This suggests that changes in depreciation allowances are used as a fiscal instrument for stabilization. A common consolidated tax base deprives national governments from implementing investment incentives via accelerated depreciation. This paper discusses the possible implementation of a hybrid system that combines features of formula apportionment and separate accounting. Such a hybrid system may substantially mitigate transfer pricing problems and other tax planning issues, whilst preserving national discretion over depreciation allowances.
SSRN Electronic Journal, 2018
CESifo Economic Studies, 2016
There is a large, yet growing debate about the need to complement the European monetary union wit... more There is a large, yet growing debate about the need to complement the European monetary union with a stronger fiscal union. This article reviews the potential trade-offs between effectiveness, moral hazard problems, and permanent redistribution. Addressing the counter-arguments against a tighter fiscal union is essential to overcome the political reluctance in some member states that are concerned about large amounts of redistribution. We discuss clawback mechanisms that have been suggested in the literature as a measure to limit redistribution, but conclude that clawbacks are undesirable, as they would essentially destroy the insurance value of a fiscal union. Instead, we propose that a clearly defined exit option as a guarantee against involuntary redistribution can make entry into a stronger fiscal union less risky and hence more attractive for member states.
Das ursprungliche Ziel des Erneuerbare-Energien-Gesetz war die Verringerung der Emissionen. Eigen... more Das ursprungliche Ziel des Erneuerbare-Energien-Gesetz war die Verringerung der Emissionen. Eigentlich hat die Politik bereits ein Instrument an der Hand, das dieses Ziel fokussiert und kostensparend erreichen kann: den Handel mit CO2-Zertifikaten. Der Autor argumentiert, dass das Nebeneinander von CO2-Handel und EEG hochst unproduktiv ist und schleunigst beendet werden sollte. Ein plausibleres Argument fur den politischen Erfolg des EEG und das derzeitige Herumdoktern im Detail ist, dass die Politik mit dem EEG Industriepolitik betreiben und die Kosten auf zukunftige Parlamente und Generationen uberwalzen kann.
SSRN Electronic Journal, 2015
There is a growing debate about complementing the European Monetary Union by a more comprehensive... more There is a growing debate about complementing the European Monetary Union by a more comprehensive fiscal union. Against this background, this paper emphasizes that there is a trade-off in designing a system of fiscal transfers ("fiscal capacity") in a union between members of different size. A system cannot guarantee symmetric treatment of members and simultaneously ensure a balanced budget. We compute hypothetical transfers for the Eurozone members from 2001 to 2012 to illustrate this trade-off. Interestingly, a symmetric system that treats shocks in small and large countries symmetrically would have produced large budgetary surpluses in 2009, the worst year of the financial crisis.
The paper discusses whether a Pareto-improving cut back of a pay-as-you-go (PAYGO) system of soci... more The paper discusses whether a Pareto-improving cut back of a pay-as-you-go (PAYGO) system of social security is feasible if there is an altruistic motive for making positive bequests. The paper argues that this cut back is possible if the PAYGO system relies on distorting labor taxes. Even in the case when only a fraction of the current old have an altruistic bequest motive it may be possible to carry out such an improvement. In this case a Pareto-improving cut back of the social security system has to be complemented by an intra-generational redistribution from individuals with children to those without kids.