How Economic Growth Reduces Poverty: A General Equilibrium Analysis for Indonesia

Poverty, Inequality, Growth, Indonesia

Agricultural Protection in a Food Importing Country: Indonesia

This paper summarizes two country-specific studies which examine the degree and changing patterns of incentives to domestic agriculture in Malaysia and Vietnam. Malaysia stands out in the developing world for its long-standing commitment to maintaining a relatively open trade and investment policy regime. However excessive assistance given to paddy farmers remains a major distortion in agricultural incentives. Market oriented reforms in Vietnam began in the late 1990 with attempts to unshackle domestic agriculture, and reforms in this areas have been wide-ranging, with the exception of excessive assistance provided to sugar cane producers. The impressive reform outcome in agriculture has played a pivotal role in sustaining the momentum of reforms, assuring the continuation of market-oriented reforms. However, remain a major anomaly in the incentive structure.International Relations/Trade,

The new international financial architecture: bail-ins, bail-outs, bail-ups and newspeak

The term ‘bailing in the private sector’ is used to describe several quite different proposals with the common feature that they all seek to make private lenders to developing countries share in the costs of financial or currency crises in these countries. The International Monetary Fund (IMF) regards it as one of the main pillars of the ‘new international financial architecture’ — that is, the package of proposals for reforming the international financial system that is intended to reduce the frequency and severity of financial and currency crises in emerging markets. The other pillars of the IMF’s proposed package are transparency, prudential regulation of financial institutions, cautious liberalisation of international capital markets and the implementation of codes of international best practice for making and documenting economic policies

Distortions to Agricultural Incentives in Indonesia

Distorted incentives, agricultural and trade policy reforms, national agricultural development, Agricultural and Food Policy, International Relations/Trade, F13, F14, Q17, Q18,

Negative gearing Redux

Should the interest paid by landlords on loans used to finance the purchase of rented houses and apartments be tax deductible? There is widespread agreement that interest payments should be deductible at least up to the amount of the landlord’s ‘net rent’ — meaning the actual rent, minus all expenses other than interest payments. In this paper, we revisit Australia’s controversial ‘negative gearing’ (NG) arrangements, under which investors can also deduct negative cash flows — defined as the excess of interest payments over earnings net of depreciation and other non-interest expenses — from their other taxable income. We focus on NG of investments in rental housing, but the principles apply also to other investments, such as equities and bonds

Capital gains, negative gearing and effective tax rates on income from rented houses in Australia

This paper reports estimates of effective tax rates on rental property income in Australia. We consider three capital gains tax regimes – the current Australian system, that which prevailed between 1985 and 1999 and a realisation tax that attempts to mimic an accruals tax. We report estimates for each regime in two scenarios—slow anticipated real capital gains and very rapid unanticipated real capital gains. Our results suggest that negative gearing should be retained and capital gains taxation reformed to approximate an accruals tax. We argue that this desirable package would be no harder to administer than the current regime

Adjustment costs and the neutrality of income taxes

A yes income tax would not affect asset values or investment decisions for given values of cash flows and pre-tax interest rates (Samuelson, 1964). However, most so-called income taxes do not fully tax capital gains on accrual. This note shows that in the absence of adjustment costs, investment decisions are not distorted by the lack of a comprehensive tax on the capital gains on unimproved land, provided that the depreciation of improvements is allowed as a tax deduction. It also provides the intuition underlying the closely related results of Hartman (1978) and Abel (1983)

Exploring the differences between forward osmosis and reverse osmosis fouling

A comparison of alginate fouling in forward osmosis (FO) with that in reverse osmosis (RO) was made. A key experimental finding, corroborated by membrane autopsies, was that FO is essentially more prone to fouling than RO, which is opposite to a common claim in the literature where deductions on fouling are often based solely on the water flux profiles. Our theoretical analysis shows that, due to a decrease in the intensity of internal concentration polarization (ICP), and thus an increase in the effective osmotic driving force during FO fouling tests, the similarity of experimental water flux profiles for FO and RO is in accordance with there being greater fouling in FO than RO. The specific foulant resistance for FO was also found to be greater than that for RO. Possible explanations are discussed and these include the influence of reverse solute diffusion from draw solution. Whilst this explanation regarding specific foulant resistance is dependent on the draw solution properties, the finding of greater overall foulant accumulation in FO is considered to be a general finding. Additionally, the present study did not find evidence that hydraulic pressure in RO plays a critical role in foulant layer compaction. Overall this study demonstrated that although FO has higher fouling propensity, it offers superior water flux stability against fouling. For certain practical applications this resilience may be important