- Número: 137
- Autor(es): Miguel Ferreira, João Pereira dos Santos and Ana Venâncio
- Mês: Dezembro
- Ano: 2019
We study the role of property taxes on entrepreneurial activity using a quasi-natural experiment, which unexpectedly reduced the upper bound of the Portuguese property tax rate for urban properties in 2008. Using a difference-indifferences approach, we find that treated municipalities (i.e., municipalities that had a property tax rate above the new upper bound) experienced higher entry rates in the manufacturing sector vis-à-vis control municipalities (i.e., municipalities that had a property tax rate at or below the new upper bound). Taking advantage of firm-level data, we show that start-ups created as a response to the decrease in property taxes in treated municipalities use more debt, invest more, and are more likely to survive.
- Número: 134
- Autor(es): Alfredo Marvão Pereira e Rui Marvão Pereira
- Mês: Outubro
- Ano: 2019
In this paper, we address the issue of energy taxation reform with an environmental focus. We do so using a multi-sector and multi-household dynamic computable general equilibrium model of the Portuguese economy. We analyze the environmental, macroeconomic, and distributional effects of different policies allowing for energy taxation to be replaced with carbon taxation while at the same time allowing for the IPCC 2018 emissions reduction targets to be achieved. Our analysis indicates a clear path in the quest for decarbonization. First, replace energy taxes with a carbon tax; second, adopt the levels of carbon taxation necessary to achieve the emissions goals; third, use extra tax revenues from the carbon tax to reverse any potential adverse macroeconomic and distributional effects of the carbon taxation. In the process, this would be a way around the pervasive problem of perverse fossil fuel subsidies, which would effectively disappear and as such would improve the efficiency of the tax system.
- Número: 136
- Autor(es): Luís Pedro Manso Machado
- Mês: Novembro
- Ano: 2019
A combinação de uma base de dados universal e de elevada qualidade para Portugal permite um estudo detalhado do comportamento da firma. Utilizamos o painel harmonizado da Central de Balanços do BPlim para o período de 2006 a 2015 para avaliar o comportamento diferenciado entre exportadores e não exportadores em Portugal. Seguimos a literatura de self-selection e de learning-by-exporting, estimando vários premiums de produtividade para empresas exportadoras. Após encontrar evidência sólida de uma vantagem produtiva dos exportadores face a não-exportadores, a qual aparenta emergir anos antes das firmas começarem a exportar, expandimos o nosso estudo de forma a identificar a casualidade dos resultados anteriores. Desta forma, estimamos um modelo logit de efeitos fixos de forma a averiguar o impacto de várias variáveis na propensão à exportação de uma empresa. Corroboramos a teoria de selfselection, dada a significância da produtividade do trabalho na probabilidade de uma empresa exportar, assim como, o efeito significativo da dimensão absoluta da empresa, quota de mercado relativa, concentração do setor e investimento.
- Número: 135
- Autor(es): José M. Belbute e Alfredo M. Pereira
- Mês: Outubro
- Ano: 2019
We provide reference forecasts for worldwide CO2 emissions from fuel fossil combustion and cement production based on an ARFIMA approach. Our projections suggest a time path for emissions that is inconsistent with the general IPCC decarbonization goals. Indeed, we project emissions to increase, over the next three decades, to levels about 11-12% above the 2010 level. For the IPCC goals to be achieved it is necessary to reduce emissions by 57.4% and 97.4% of 2010 emissions by 2030 and 2050, respectively. Furthermore, the bulk of these efforts have to take place by 2030. This implies that the policy efforts necessary to achieve such goals are not only daunting but also frontloaded. Finally, the presence in the data of long memory with mean reversion suggests that policies must be persistent to ensure that these reductions in emissions are also permanent. These results add to the sense of urgency in dealing with the issue of decarbonization. The policy efforts necessary to achieve IPCC decarbonization goals are urgent, daunting and frontloaded.
- Número: 133
- Autor(es): Lee Branstetter, Brian Kovak, Jacqueline Mauro e Ana Venâncio
- Mês: Outubro
- Ano: 2019
This paper considers the effects of Chinese import competition on firm-level labor market outcomes in Portugal. We examine direct competition in the Portuguese market and indirect competition Portugal's largest export markets in Western Europe. Using rich employer-employee data matched to firm-level trade transactions, we measure the degree to which different Portuguese firms faced Chinese import competition, based on firm product mix and distribution of sales across countries. We find economically and statistically significant employment declines in firms with more exposure to Chinese competition in European export markets, but minimal effects of direct competition in Portugal. Our findings also suggest a centrally important role for Portugal's stringent labor market regulations in limiting firms' ability to adjust to competitive shocks. In our earlier sample period (1995-2000), firms have limited ability to adjust employment, hours, or wages, and the primary adjustment margin is firm exit. In the later period (2000-2007), when more flexible temporary contracts comprise a larger share of employment, we find employment reductions among more exposed firms.
- Número: 132
- Autor(es): Alfredo Marvão Pereira e Rui Manuel Pereira
- Mês: Outubro
- Ano: 2019
This article examines the economic, distributional and environmental impacts of the regulated early closure of coal-fired power plants in Portugal using a multi-sector and multi-household dynamic computable general equilibrium model. The closure of the power plants has positive and significant environmental effects. It results, however, in an increase in electricity prices, which, in turn, leads to detrimental macroeconomic and distrib utional effects. We argue that a carbon tax with the same environmental impact would have substantial conceptual, pragmatic and pedagogical advantages over regulated early plant closures. It would generate the tax revenues necessary to mitigate or reverse the adverse macroeconomic and distributional effects. Regulated early closures could be a good second best alternative if there is no political will for or consensus on the implementation of a proper carbon tax with adequate revenue recycling. In any case, these plant closures are far from leading to the reductions in emissions established by the IPCC and adopted by the Portuguese authorities.
- Número: 131
- Autor(es): Alfredo Marvão Pereira e Rui Marvão Pereira
- Mês: Setembro
- Ano: 2019
In this paper, we compare and contrast the environmental, macroeconomic and distributive effects of CO2 taxation with the effects of taxing a variety of air pollutants at their external costs. We do so using a multi-sector and multi-household dynamic computable general equilibrium model of the Portuguese economy. We find that a carbon tax of 114 euros per ton of CO2 is necessary to achieve the IPCC 2030 targets. It does so, however, at a high macroeconomic and distributional cost. In turn, the macroeconomic and distributional effects of taxing different pollutants at their external costs in line both qualitatively and quantitatively with the effects of the CO2 taxation.
- Número: 129
- Autor(es): Alfredo Marvão Pereira e Rui Marvão Pereira
- Mês: Agosto
- Ano: 2019
In this paper, we address the issue of how to finance the excess costs of electricity generation from currently installed renewable energy production capacity. We do so using a multi-sector and multi-household dynamic computable general equilibrium model of the Portuguese economy. We consider three issues: the effects of the existence of these excess-costs; the effects of annuitizing such costs; and, the effects of different financing mechanisms. Following the logic of the tariff deficit, we recommend the annuitizing of these excess costs. This strategy can be justified on distributional grounds. We also find that financing through carbon taxation is a better alternative than passing these excess costs through to electricity consumers in the form of higher future electricity prices. This is consistent with the idea that renewable electricity production is not an issue pertaining exclusively to the electricity market but rather a part of the national quest for decarbonization. Finally, we show that there is little reason from an environmental perspective to extend such preferential financing mechanisms to any future renewable capacity installation.
- Número: 130
- Autor(es): Aurora Teixeira e Ana Sofia Loureiro
- Mês: Setembro
- Ano: 2019
The empirical evidence on how inflows of foreign direct investment impact on income inequality and poverty of a country is scarce and produces divergent results. Moreover, most existing studies look into underdeveloped or developing countries. The aim of this study is to contribute to the empirical literature on the relationship between foreign direct investment (FDI), poverty and income inequality, focusing on a little explored context, a developed country, Portugal, characterized by having relatively high levels of inequality and poverty. Using time series estimates (cointegration), in particular, the Johansen test and Granger causality, for the period between 1973 and 2014, the results show that there is a longstanding relationship between inflows of foreign investment and the indicators of inequality and poverty.
- Número: 128
- Autor(es): Alfredo Marvão Pereir e and Rui Marvão Pereira
- Mês: Agosto
- Ano: 2019
In this paper, we compare the effects of removing harmful fossil fuel subsidies with the replacement of the energy taxation by a carbon tax in Portugal. Since energy taxes focus on the energy content of the different energy products eliminating these provisions only brings their prices in line with their energy content. On the other hand, replacing the energy tax system with a tax on the emissions content of the energy products aligns the fossil fuel prices with their emissions content. We show that while replacing the energy with a carbon tax is a policy of a magnitude about eight times as large as the removal of the harmful subsidies, the effects of emissions are twenty times larger and the adverse economic and distributional effects only about twice as large. Accordingly, replacing the energy tax with a carbon tax is a much more cost-effective way of reducing emissions.
This may suggest that focusing on the removal of harmful fossil fuel subsidies may be an environmental red herring.
