Seminars

Frédéric Malherbe - London Business School

November 3, 2017
5:00 pmto6:30 pm

A Positive Analysis of Bank Behaviour under Capital Requirements

Burhanettin Kuruscu - University of Toronto

November 13, 2017
5:00 pmto6:30 pm

Use It or Lose It: Efficiency Gains from Wealth Taxation (with Fatih Guvenen, Gueorgui Kambourov, Sergio Ocampo-Diaz and Daphne Chenk)

Abstract:
This paper studies the quantitative implications of wealth taxation (tax on the stock of wealth) as opposed to capital income taxation (tax on the income flow from capital) in an overlapping-generations incomplete-markets model with rate of return heterogeneity across individuals. With such heterogeneity, capital income and wealth taxes have opposite implications for efficiency and some key distributional outcomes. Under capital income taxation, entrepreneurs who are more productive, and therefore generate more income, pay higher taxes. Under wealth taxation, on the other hand, entrepreneurs who have similar wealth levels pay similar taxes regardless of their productivity, which expands the base and shifts the tax burden toward unproductive entrepreneurs. This reallocation increases aggregate productivity and output. In the simulated model calibrated to the US data, a revenue-neutral tax reform that replaces capital income tax with a wealth tax raises welfare by about 8% in consumption-equivalent terms. Moving on to optimal taxation, the optimal wealth tax is positive, yields even larger welfare gains than the tax reform, and is preferable to optimal capital income taxes. Interestingly, optimal wealth taxes result in more even consumption and leisure distributions (despite the wealth distribution becoming more dispersed), which is the opposite of what optimal capital income taxes imply. Consequently, wealth taxes can yield both efficiency and distributional gains.

Lunch Seminar: Sergei Severinov - University of British Columbia

November 8, 2017
1:00 pmto2:00 pm

Bilateral Communication and Partnership Formation

Abstract:
We consider match formation between two parties, such as marriage, merger or partnership formation. Each party has private information about the value of the match, which creates friction in the matching process. We focus on the role of bilateral communication in this setting and investigate how such communication should be organized in order to improve the matching process. Different communication protocols are considered, and their outcomes are characterized. Our main results indicate that a simple communication protocol which involves one round of communication is sufficient, in the sense that the matching outcome is invariant to length and order of communication. Our analysis also provides a perspective on the role of a neutral mechanism designer or a mediator in this process.

Lunch Seminar: Darryl Biggar - Australian Antitrust

November 17, 2017
1:00 pmto2:00 pm

TBA

Eric J. Bartlesman - Tinbergen Institute, VU Amsterdam

November 16, 2017
5:00 pmto6:30 pm

TBA

Nicola Pavoni - Università Commerciale Luigi Bocconi

November 6, 2017
5:00 pmto6:30 pm

Optimal Delegation, Unawareness and Financial Intermediation (with Sarah Auster)

Abstract:
We study the delegation problem between an investor and a financial intermediary. The intermediary has private information about the state of the world that determines the return of the investment. Moreover, he has superior awareness of the available investment opportunities and decides whether to reveal some of them to the investor. We show that the intermediary has incentives to make the investor aware of investment opportunities at the extremes, e.g. very risky and very safe projects, while leaving the investor unaware of intermediate investment options. We study how the extent to which the intermediary reveals available investment opportunities to the investor depends on the investor’s initial awareness and the degree of competition between intermediaries in the market. We provide evidence of the mechanism described by the model using self-reported data on small investor’s experience in the Italian retail investment sector.

Guillaume Plantin - (Toulouse School of Economics)

November 27, 2017
5:00 pmto6:30 pm

TBA

Isabelle Perrigne - Rice University

November 30, 2017
5:00 pmto6:30 pm

TBA

Pasquale Schiraldi - London School of Economics

November 23, 2017
5:00 pmto6:30 pm

TBA

Daniel Sturm - London School of Economics

November 9, 2017
5:00 pmto6:30 pm

The Making of the Modern Metropolis: Evidence from London (with Stephan Heblich and Steve Redding)