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  • Pietilä-Hella, Riitta (2000)
    This essay collection is comprised of six previously unpublished essays. All of the essays deal with the following questions: the manifestation of individuality and individualization and the ways and means in which they are detached and involved. The framework is based upon the time in which we now live, which is dealt with using classical perspectives. These perspectives are used in order to reflect the present day; Georg Simmel and Norbert Elias from a sociologist point of view and philosopher Emmanuel Levinas from a philosophical. The use of the classics for perspective and the essay format both interact and are interdependent upon one another. The research method used - the essay format - can be seen in modern-day diagnostics. The sociological critical essay is embodied in interdisciplinary research, which deals with literature, philosophy, art and science. The use of the essay format as the research method aspired to prevent what can be seen as objectionable prevailing thought and conformity. With the help of the classics, the essays aspired to bring to light four perspectives. The first is the perspective of the past, which reveals classical thought through the interpretation of their own times. The second perspective is the present-day, using classical times as a point of departure. In this way, the classics aid us in seeing our own times and its phenomena. The third is to look at our own times diagonally, disengaging from current discussion and the need to discover, in the use of professional jargon, the origin and points of fusion of the terminology. The fourth was detachment, estimation and the attempt to see things in a fresh way. The latter two goals are connected to Norbert Elias's concept of involvement-detachment as a cognitive device. The essay collection brings forth three themes concerning individuality and individuali-zation. The first is the orientation framework of the perspective of the individual. The question arose whether the discussion of individuality and individualization has come to the stage where a centuries old anthropocentric orientation is to be seen as a serious challenger? It remains to be seen whether these are based on biocentric orientation or some other framework. The second theme revolves around the question of whether we have come to the stage where individuality and individualization are involved in an entirely different fashion. One perspective which becomes apparent in this essay collection is Emmanuel Levinas's idea of ethics as the first philosophy, which is the foundation of individualization. The third and central result is that the present-day horizontal can be looked at in a different light and demands a new orientation. What and how can individuality and individualization "be", if and when the framework becomes contingent and ambivalent? Keywords: individuality, individualization, social, the civilizing process
  • Vanhala, Juuso (Helsingin yliopisto, 2007)
    The dissertation consists of an introductory chapter and three essays that apply search-matching theory to study the interaction of labor market frictions, technological change and macroeconomic fluctuations. The first essay studies the impact of capital-embodied growth on equilibrium unemployment by extending a vintage capital/search model to incorporate vintage human capital. In addition to the capital obsolescence (or creative destruction) effect that tends to raise unemployment, vintage human capital introduces a skill obsolescence effect of faster growth that has the opposite sign. Faster skill obsolescence reduces the value of unemployment, hence wages and leads to more job creation and less job destruction, unambiguously reducing unemployment. The second essay studies the effect of skill biased technological change on skill mismatch and the allocation of workers and firms in the labor market. By allowing workers to invest in education, we extend a matching model with two-sided heterogeneity to incorporate an endogenous distribution of high and low skill workers. We consider various possibilities for the cost of acquiring skills and show that while unemployment increases in most scenarios, the effect on the distribution of vacancy and worker types varies according to the structure of skill costs. When the model is extended to incorporate endogenous labor market participation, we show that the unemployment rate becomes less informative of the state of the labor market as the participation margin absorbs employment effects. The third essay studies the effects of labor taxes on equilibrium labor market outcomes and macroeconomic dynamics in a New Keynesian model with matching frictions. Three policy instruments are considered: a marginal tax and a tax subsidy to produce tax progression schemes, and a replacement ratio to account for variability in outside options. In equilibrium, the marginal tax rate and replacement ratio dampen economic activity whereas tax subsidies boost the economy. The marginal tax rate and replacement ratio amplify shock responses whereas employment subsidies weaken them. The tax instruments affect the degree to which the wage absorbs shocks. We show that increasing tax progression when taxation is initially progressive is harmful for steady state employment and output, and amplifies the sensitivity of macroeconomic variables to shocks. When taxation is initially proportional, increasing progression is beneficial for output and employment and dampens shock responses.
  • Korkeamäki, Ossi (Government Institute for Economic Research, 2012)
    The first essay in this thesis is on gender wage differentials among manufacturing sector white-collar workers. The wage differential is decomposed into firm, job (within-firm) and individ-ual-level components. Job-level gender segregation explains over half of the gap, while firm-level segregation is not important. After controlling for firm, job and individual characteristics, the remaining unexplained wage cap to the advantage of men is six per cent of men s mean wage. In the second essay, I study how the business cycle and gender affect the distribution of the earnings losses of displaced workers. The negative effect of displacement is large, persistent and strongest in the lowest earnings deciles. The effect is larger in a recession than in a recov-ery period, and in all periods women s earnings drop more than men s earnings. The third essay shows that the transition from steady employment to disability pension de-pends on the stringency of medical screening and the degree of experience-rating of pension costs applied to the employer. The fact that firms have to bear part of the cost of employees disability pension costs lowers both the incidence of long sick leave periods and the probabil-ity that sick leave ends in a disability pension. The fourth and fifth essays are studies on the employment, wage and profit effects of a re-gional payroll tax cut experiment conducted in northern and eastern Finland. The results show no statistically significant effect on any of the response variables.
  • Sinko, Pekka (2004)
    The study consists of four essays that analyse the implications of labour taxation and unemployment insurance (UI) in the models of imperfectly competitive labour markets. The first essay studies the effects of labour taxation on wages, unemployment and efficiency in a search equilibrium model with endogenous job destruction. It is shown that the adverse employment effect of labour taxes is mainly due to prolonged unemployment spells and less so due to increased job destruction. If wage setting is based on bargaining, a pure increase in the tax progression reduces unemployment, improves the relative position of low-income workers and facilitates the emergence of low-productivity jobs. The second essay considers a set up where the economic agents perceive the link between taxes paid and the benefits received due to the centralised wage setting institutions. It is shown that centralisation promotes wage moderation, makes wages and employment less sensitive to changes in the wage taxation and reduces hours worked. With individual supply of working hours, a wage tax can even improve employment if the marginal utility of the public expenditure is sufficiently high. If a profit tax is used to finance the public provision, a higher tax reduces wages and improves employment. The third essay introduces a model where tax-alike payments are used to finance UI funds run by the industry level unions. Alternative ways to organize government subsidies are compared in a right-to-manage framework. It is shown that equilibrium unemployment is decreasing in the share of UI financed by the employed union members. A reduction in the proportional subsidies matched by an increase in the lump sum grant is shown to bring about wage moderation and improve employment. If labour market parties can influence the level of benefits, a subsidy scheme with a fixed assistance per unemployed is preferable to one covering a fixed share of the total UI costs. The fourth essay analyses the effects of UI in a job search model with endogenous search effort. The model is simulated numerically with the parameters fitted to the stylised facts of the Finnish labour market. It is shown that UI with limited potential duration promotes search effort among the long-term unemployed that have exhausted a considerable amount of the current benefit spell. The positive effect starts to dominate the earlier, the steeper is the decline in the replacement ratio and the more insecure are the job contracts. A reform that combines a declining replacement ratio with an increased initial level of benefits is shown to increase search effort throughout the benefit period.
  • Sinko, Pekka (2004)
    Tutkimus käsittää neljä artikkelia, joissa tarkastellaan työtulojen verotuksen ja työttömyysturvan vaikutuksia epätäydellisen kilpailun työmarkkinoita kuvaavissa analyyttisissa malleissa. Ensimmäinen artikkeli käsittelee työtulojen verotuksen vaikutusta työllisyyteen ja tehokkuuteen etsintämallissa, jossa työsuhteen päättyminen on endogeeninen. Osoittautuu, että verojen työllisyyttä alentava vaikutus johtuu ensisijaisesti työttömyysjaksojen pidentymisestä ja vähemmässä määrin lisääntyvistä irtisanomisista. Mikäli palkoista neuvotellaan, veroprogression kasvattaminen vähentää työttömyyttä sekä parantaa pienipalkkaisten työntekijöiden suhteellista asemaa ja edistää matalan tuottavuuden työpaikkojen syntymistä. Toinen artikkeli tarkastelee työverojen vaikutusta mallissa, jossa keskitetyn palkanmuodostuksen ansiosta otetaan huomioon verojen ja julkisen vallan tarjoamien etuisuuksien välinen yhteys. Osoittautuu, että keskitetty palkanmuodostus edistää maltillista palkkakehitystä, vähentää tehtyjä työtunteja sekä pienentää verojen negatiivista vaikutusta työllisyyteen. Kun yksilöt päättävät työtuntien tarjonnasta ja julkisten hyödykkeiden rajahyöty on riittävän korkea, palkkavero saattaa jopa parantaa työllisyyttä. Jos julkiset menot rahoitetaan voittoverolla, korkeampi verotus alentaa palkkavaateita ja parantaa työllisyyttä. Kolmannessa artikkelissa tarkastellaan erilaisia julkisen subvention muotoja mallissa, jossa ammattiliittojen ylläpitämät työttömyysturvarahastot keräävät jäseniltään veroluonteisia maksuja. Osoittautuu, että tasapainossa työttömyys on sitä alhaisempi, mitä korkeampi on työssäkäyvien jäsenten rahoitusosuus. Jos työttömyysturvan kokonaismenoihin suhteutettua julkista tukea korvataan kiinteällä tuella, palkkavaatimukset pienevät ja työllisyys paranee. Mikäli työmarkkinaosapuolet voivat vaikuttaa työttömyysturvan tasoon, kiinteään yksilökohtaiseen tukeen perustuva järjestelmä on työllisyyden kannalta parempi kuin kokonaismenoihin suhteutettu tuki. Neljäs artikkeli käsittelee työttömyysturvan vaikutuksia mallissa, jossa työnhakijan etsintäintensiteetti määräytyy endogeenisesti. Mallia simuloidaan numeerisesti käyttäen parametrejä, jotka kuvaavat tyylitellysti Suomen työmarkkinoita ja ansiosidonnaista työttömyysturvaa. Osoittautuu, että enimmäiskestoltaan rajoitettu työttömyysturva lisää pitkään työttömänä olleiden etsintäintensiteettiä. Tämä positiivinen vaikutus alkaa dominoida sitä aiemmin, mitä nopeammin korvausaste laskee ja mitä epävarmemmaksi työsuhteet koetaan. Yhdistämällä nopeampi alenema korkeampaan korvausasteen lähtötasoon voidaan työhön hakeutumista kannustaa työttömyysturvan kokonaistasoa heikentämättä.
  • Railavo, Jukka (Suomen Pankki, 2006)
    Economic and Monetary Union can be characterised as a complicated set of legislation and institutions governing monetary and fiscal responsibilities. The measures of fiscal responsibility are to be guided by the Stability and Growth Pact, which sets rules for fiscal policy and makes a discretionary fiscal policy virtually impossible. To analyse the effects of the fiscal and monetary policy mix, we modified the New Keynesian framework to allow for supply effects of fiscal policy. We show that defining a supply-side channel for fiscal policy using an endogenous output gap changes the stabilising properties of monetary policy rules. The stability conditions are affected by fiscal policy, so that the dichotomy between active (passive) monetary policy and passive (active) fiscal policy as stabilising regimes does not hold, and it is possible to have an active monetary - active fiscal policy regime consistent with dynamical stability of the economy. We show that, if we take supply-side effects into ac-count, we get more persistent inflation and output reactions. We also show that the dichotomy does not hold for a variety of different fiscal policy rules based on government debt and budget deficit, using the tax smoothing hypothesis and formulating the tax rules as difference equations. The debt rule with active monetary policy results in indeterminacy, while the deficit rule produces a determinate solution with active monetary policy, even with active fiscal policy. The combination of fiscal requirements in a rule results in cyclical responses to shocks. The amplitude of the cycle is larger with more weight on debt than on deficit. Combining optimised monetary policy with fiscal policy rules means that, under a discretionary monetary policy, the fiscal policy regime affects the size of the inflation bias. We also show that commitment to an optimal monetary policy not only corrects the inflation bias but also increases the persistence of output reactions. With fiscal policy rules based on the deficit we can retain the tax smoothing hypothesis also in a sticky price model.
  • Hämäläinen, Saara (Helsingin yliopisto, 2015)
    Our thesis has three individual papers and an introduction. It contributes to dynamic price and search theory. The first paper deals with the classic problem of trading under asymmetric information. The other two analyze retailing strategies that help lock in buyers by creating in-store frictions. In the first paper, we investigate welfare and equilibrium trading in a decentralized search market with asymmetric information and bilateral communication opportunities. Sellers and buyers meet randomly and pairwise and view a shared signal of the seller's quality. In the following signaling game, the sellers can either rely on this costless signal (pool) or costly signaling (separate). We observe that, although the average market quality is high, additional information is not generally welfare improving. All equilibria are inefficient. Contrary to the usual tradeoff between price and liquidity, we find that the signals can help sustaining stationary Markovian equilibria where higher quality is traded faster. In the second paper, we construct a novel search model that features in-store frictions and equilibrium price dispersion both within and across stores. The frictions originate from the gradual arrival of price information within stores and the existence of deadlines for buyers. We show that sellers have an incentive carry several similar items and generate price variation among these items to amplify the existing search frictions and create barriers to switching in an environment where none exist initially. It also helps them to discriminate better between buyers, who end with diverse degrees of price information. As the number of items in stock expands, sellers can extract more profits. In our third paper, we develop a price search model that features endogenous frictions in a duopolistic environment. These frictions originate from the gradual arrival or price information within stores and the existence of deadlines for buyers. We show that both sellers have a strategic incentive to generate frictions. There exists exactly two equilibria with a unique asymmetric pattern: a prominent seller, whose expected price is higher but the in-store frictions lower, and a non-prominent seller. The buyers are divided exactly equally into informed and uninformed consumers, and into those who fail to find anything. Under the Poisson process, this surplus loss is about 6 %.
  • Khondker, Aktaruzzaman (Department of Economics, Faculty of Social Sciences, 2009)
    This thesis is a collection of three essays on Bangladeshi microcredit. One of the essays examines the effect of microcredit on the cost of crime. The other two analyze the functioning mechanism of microcredit programs, i.e. credit allocation rules and credit recovery policy. In Essay 1, the demand for microcredit and its allocation rules is studied. Microcredit is claimed to be the most effective means of supplying credit to the poorest of the poor in rural Bangladesh. This fact has not yet been examined among households who demand microcredit. The results of this essay show that educated households are more likely to demand microcredit and its demand does not differ by sex. The results also show that microcredit programs follow different credit allocation rules for male and female applicants. Education is an essential characteristic for both sexes that credit programs consider in allocating credit. In Essay 2, the focus is to establish a link between microcredit and the incidence of rural crime in Bangladesh. The basic hypothesis is that microcredit programs jointly hold the group responsibility which provides an incentive for group members to protect each other from criminal gang in order to safeguard their own economic interests. The key finding of this essay is that the average cost of crime for non-borrowers is higher than that for borrowers. In particular, 10% increase in the credit reduces the costs of crime by 4.2%. The third essay analyzes the reasons of high repayment rate amid Bangladeshi microcredit programs. The existing literature argues that credit applicants are able to screen out the high risk applicants in the group formulation stage using their superior local information. In addition, due to the joint liability mechanism of the programs, group members monitor each others economic activities to ensure the minimal misuse of credit. The arguments in the literature are based on the assumption that once the credit is provided, credit programs have no further role in ensuring that repayments are honored by the group. In contrast, using survey data this essay documents that credit programs use in addition organizational pressures such as humiliation and harassment the non-payer to recover the unpaid installments. The results also show that the group mechanisms do not have a significant effect in recovering default dues.
  • Seppälä, Timo (Helsingin yliopisto, 2008)
    The dissertation consists of three essays on misplanning wealth and health accumulation. The conventional economics assumes that individual's intertemporal preferences are exponential (exponential preferences, EP). Recent findings in behavioural economics have shown that, actually, people do discount near future relatively heavier than distant future. This implies hyperbolic intertemporal preferences (HP). Essays I and II concentrate especially on the effects of a delayed completion of tasks, a feature of behaviour that HP enables. Essay III uses current Finnish data to analyse the evolvement of the quality adjusted life years (QALYs) and inconsistencies in measuring that. Essay I studies the existence effects of a lucrative retirement savings program (SP) on the retirement savings of different individual types having HP. If the individual does not know that he will have HP also in the future, i.e. he is the naïve, for certain conditions, he delays the enrolment on SP until he abandons it. Very interesting finding is that the naïve retires then poorer in the presence than in the absence of SP. For the same conditions, the individual who knows that he will have HP also in the future, i.e. he is the sophisticated, gains from the existence of SP, and retires with greater retirement savings in the presence than in the absence of SP. Finally, capabilities to learn from past behaviour and about intertemporal preferences improve possibilities to gain from the existence but an adequate time to learn must be then guaranteed. Essay II studies delayed doctor's visits, theirs effects on the costs of a public health care system and government's attempts to control patient behaviour and fund the system. The controlling devices are a consultation fee and a deductible for that. The deductible is effective only for a patient whose diagnosis reveals a disease that would not get cured without the doctor's visit. The naives delay their visits the longest while EP-patients are the quickest visitors. To control the naives, the government should implement a low fee and a high deductible, while for the sophisticates the opposite is true. Finally, if all the types exist in an economy then using an incorrect conventional assumption that all individuals have EP leads to worse situation and requires higher tax rates than assuming incorrectly but unconventionally that only the naives exists. Essay III studies the development of QALYs in Finland 1995/96-2004. The essay concentrates on developing a consistent measure, i.e. independent of discounting, for measuring the age and gender specific QALY-changes and their incidences. For the given time interval, use of a relative change out of an attainable change seems to be almost intact to discounting and reveals that the greatest gains are for older age groups.
  • Wamai, Richard (1999)
    This thesis analyses the relationships between non-governmental organizations (NGOs) and the state in Finland and in Africa with an emphasis on Kenya taking in mind major aspects of State in the cases. In order to realise this objective, a discussion of state, civil society and theories of non-profit organisations (NPOs) has been done. The thesis has traced the historical development of voluntary organisations (VOs), vis a vis that of state, thereby outlining a genuine platform of significant precedent. The thesis is divided into three overall chapters. Chapter one, divided in three sections, captures a theoretical appraisal of the state, civil society, where issues of terminology and concepts are defined, and the theories of NPOS, given that NGOs are accorded an, especially certain, economic, political, social and cultural value; chapter two examines how the relations develop within the Finnish (Scandinavian) welfare state; and chapter three investigates developing democracies and NGOs in the sub-Sahara with special emphasis/cases from Kenya. 'Further perspectives' are added calling on responsible conduct of governmentality. One of the most interesting finding is that state development in both Finland and Africa is closely associated with VOs. Emerging as protest movements prior to independence, VOs helped consolidate cultural-political capital which was instrumental in founding the state, especially in Africa. However, in the event of the founding of the welfare-state project in Finland, and the nationbuilding project in Africa, VOs were hijacked in the name of nationalism. The Scandinavian welfare state mainly displaced civil society with its universal suffrage schemes of 'social security'. The one-party structures of African weak governments mainly produced an underground sector that was terrorised and victimised in the name of 'national/state security'. In the Scandinavian welfare model, however, faced with incompetence and the surfacing of poverty and social exclusion, and new economical/fiscal realities, a dialogue is emerging where NGOs, albeit heavily state-dependent, play a complementary or collaborative role but not as equal partners. In the sub-Sahara, on the other hand, complex relations hang precariously between two extremes: adversarial and collaborative. In both cases, elaborate opportunity structures and circumstances, vulgarised by 'global'/regional processes exist. In both cases, an extensive surveillance/control-of-society mechanism is exacted. State-NGO relations are embryonic of society's primary concern with power, democracy, resources and control. Thus, any understanding of state-society relations must begin here, especially on the delimitation of space, obviously a political issue. The theoretical construct of this work starts with the view that the state is a first, but not necessarily the last, actor. The conduct of society is eschewed in governmental rationality in which an art/technique of State, stealth (welfare) or otherwise (weak), ultimately defines relational frameworks. This thesis is a theoretical apparatus and has resulted from an extensive review of government acts, academic texts, books and articles, a small group of which is published in the Internet. Many authors, eg., Alan Fowler, Michael Bratton, Immanuel Wallerstein, Stephen Ndegwa, Martti Siisiäinen, Tore Modeen, Matti Heikkilä, Henry Hansmann, Lester Salamon, Goran Hyden, Anthony Giddens, Reinhard Bendix, Marvine Olsen, David Hulme and Michael Edwards, and Stein Kuhnle and Per Selle, as well as over two hundred others, are discussed through the pages.
  • Solanko, Laura (Suomen Pankki, 2007)
    This study comprises an introductory section and three essays analysing Russia's economic transition from the early 1990s up to the present. The papers present a combination of both theoretical and empirical analysis on some of the key issues Russia has faced during its somewhat troublesome transformation from state-controlled command economy to market-based economy. The first essay analyses fiscal competition for mobile capital between identical regions in a transition country. A standard tax competition framework is extended to account for two features of a transition economy: the presence of two sectors, old and new, which differ in productivity; and a non-benevolent regional decision-maker. It is shown that in very early phase of transition, when the old sector clearly dominates, consumers in a transition economy may be better off in a competitive equilibrium. Decision-makers, on the other hand, will prefer to coordinate their fiscal policies. The second essay uses annual data for 1992-2003 to examine income dispersion and convergence across 76 Russian regions. Wide disparities in income levels have indeed emerged during the transition period. Dispersion has increased most among the initially better-off regions, whereas for the initially poorer regions no clear trend of divergence or convergence could be established. Further, some - albeit not highly robust - evidence was found of both unconditional and conditional convergence, especially among the initially richer regions. Finally, it is observed that there is much less evidence of convergence after the economic crisis of 1998. The third essay analyses industrial firms' engagement in provision of infrastructure services, such as heating, electricity and road maintenance. Using a unique dataset of 404 large and medium-sized industrial enterprises in 40 regions of Russia, the essay examines public infrastructure provision by Russian industrial enterprises. It is found that to a large degree engagement in infrastructure provision, as proxied by district heating production, is a Soviet legacy. Secondly, firms providing district heating to users outside their plant area are more likely to have close and multidimensional relations with the local public sector.
  • Freystätter, Hanna (Suomen Pankki (Bank of Finland), 2012)
    This thesis consists of an introductory chapter and three essays, all of which aim to study the functioning of a small open economy. The thesis starts with an investigation of export and import price determination and moves to a small open economy DSGE model framework in order to study the role of financial factors in economic fluctuations. In all three essays, theoretical small open economy models are used for quantitative analysis of the small open economy of Finland. The first essay develops a model for aggregate trade price inflation that takes into account two price setting conventions: local currency pricing (LCP) and producer currency pricing (PCP). In our empirical work, we confront our model with Finnish data and estimate the relative shares of LCP and PCP firms in the economy. In the estimation period 1980 1998, the share of local currency pricing was 40 percent in the export sector and 60 percent in the import sector, implying a limited pass-through from exchange rate to destination-country prices in both sectors. The second essay builds a small open economy DSGE model with the BGG financial accelerator and financial market shocks. In our empirical work covering the period 1995 2008, we provide evidence of an operative financial accelerator in Finland. The financial accelerator acts as an amplifying mechanism for many disturbances hitting the Finnish economy. Our main result is that financial market disturbances have contributed significantly to Finnish cyclical fluctuations between 1995 and 2008. Even allowing for several shocks stemming from both domestic sources and the international economy, domestic financial market shocks emerge as key drivers of recent business cycle fluctuations in Finland. The third essay studies the boom-bust period in Finland in the late 1980s and early 1990s, focusing on the role of financial factors and investment behaviour. We construct a small open economy DSGE model with the BGG financial accelerator and an unconventional shock structure that captures the key events of the episode. In this model framework, we study the role of financial market deregulation in the boom, the negative impact of the collapse of Soviet-Finnish trade in 1991, and the effect of the collapse of the fixed exchange rate regime in 1992. We argue that the financial accelerator mechanism is a key amplifying mechanism that helps the model to match, in particular, the large and persistent swings of investment first above and later below its trend. This essay demonstrates that the shocks Finland encountered combined with financial frictions are able to produce a boom and a severe depression, matching key salient features of the actual boom-bust cycle experienced in Finland in the late 1980s and early 1990s.
  • Iho, Antti (MTT, 2010)
    Phosphorus is a nutrient needed in crop production. While boosting crop yields it may also accelerate eutrophication in the surface waters receiving the phosphorus runoff. The privately optimal level of phosphorus use is determined by the input and output prices, and the crop response to phosphorus. Socially optimal use also takes into account the impact of phosphorus runoff on water quality. Increased eutrophication decreases the economic value of surface waters by Deteriorating fish stocks, curtailing the potential for recreational activities and by increasing the probabilities of mass algae blooms. In this dissertation, the optimal use of phosphorus is modelled as a dynamic optimization problem. The potentially plant available phosphorus accumulated in soil is treated as a dynamic state variable, the control variable being the annual phosphorus fertilization. For crop response to phosphorus, the state variable is more important than the annual fertilization. The level of this state variable is also a key determinant of the runoff of dissolved, reactive phosphorus. Also the loss of particulate phosphorus due to erosion is considered in the thesis, as well as its mitigation by constructing vegetative buffers. The dynamic model is applied for crop production on clay soils. At the steady state, the analysis focuses on the effects of prices, damage parameterization, discount rate and soil phosphorus carryover capacity on optimal steady state phosphorus use. The economic instruments needed to sustain the social optimum are also analyzed. According to the results the economic incentives should be conditioned on soil phosphorus values directly, rather than on annual phosphorus applications. The results also emphasize the substantial effects the differences in varying discount rates of the farmer and the social planner have on optimal instruments. The thesis analyzes the optimal soil phosphorus paths from its alternative initial levels. It also examines how erosion susceptibility of a parcel affects these optimal paths. The results underline the significance of the prevailing soil phosphorus status on optimal fertilization levels. With very high initial soil phosphorus levels, both the privately and socially optimal phosphorus application levels are close to zero as the state variable is driven towards its steady state. The soil phosphorus processes are slow. Therefore, depleting high phosphorus soils may take decades. The thesis also presents a methodologically interesting phenomenon in problems of maximizing the flow of discounted payoffs. When both the benefits and damages are related to the same state variable, the steady state solution may have an interesting property, under very general conditions: The tail of the payoffs of the privately optimal path as well as the steady state may provide a higher social welfare than the respective tail of the socially optimal path. The result is formalized and an applied to the created framework of optimal phosphorus use.
  • Landy, Fidelis (2012)
    This paper examines the profit-shifting motive of a government trade policy and investigates the effects of vertical structures and tariffs when markets are characterized by Cournot oligopoly. I also analyze the impact of competition on the price and output decisions of upstream producers. I show that vertical integration affects the direction in which the domestic country aims to switch trade flows by import tariffs. Under vertical integration a domestic tariff on final good imports indirectly harms domestic input producers, while under non-integration tariffs increase both domestic and foreign input supply. I show that upstream competition decreases output and the price at which the input is traded.
  • Lassila, Jukka (2000)
    The three essays in this collection approach taxation as a group of policy instruments, and study how their use is connected to and affected by wage formation in the economy. Two essays have been published and the third is forthcoming in scientific journals. There is also an introductory essay summarising the three essays and relating them to other studies. In the first essay the role of taxation is to act as an automatic stabiliser in the face of different shocks. Wage formation is uninstitutional. The policy instrument is the degree of indexation of income taxes to prices. The essay combines two theoretical models from previous literature. The essay shows that earlier results, concerning both income tax indexation and the role of openness in deciding the optimal degree of wage indexation, do not hold under some more general assumptions. The second essay was originated by the tax threat experiment in Finland in the late 1980s. The aim of policy is to cure an acute inflation problem. Thus the time horizon is one bargaining round. Several trade unions take part in wage bargaining. The policy instrument is a conditional threat to increase taxes. The study develops a one-shot game describing the determination of the threat and the decisions of the unions. The article gives one possible rationalisation for the use and success of tax threat policies, and discusses reasons why this instrument is not used more often. In the third essay the aim of policies is to increase efficiency and welfare in the economy. The time span is several decades, long enough for households and firms to have fully adjusted their behaviour to the tax and transfer structure. Wage setting is done by majority-voting by life-cycle optimisers in a centralised monopoly union. The essay extends a well-known dynamic general equilibrium simulation model to include a trade union. Tax and transfer structure is shown to affect the economy through dynamic channels and in a way which depends significantly on wage formation.
  • Lassila, Jukka (2000)
    Kokoelman esseissä verotusta tarkastellaan talouspolitiikan instrumenttina ja tutkitaan sen käytön vuorovaikutusta talouden palkanmuodostuksen kanssa. Kaksi esseistä on julkaistu tieteellisissä aikakauskirjoissa ja kolmas hyväksytty julkaistavaksi. Ensimmäisessä esseessä verotus toimii automaattisena vakauttajana shokkien kohdatessa taloutta. Tutkimuksessa yhdistetään kaksi aiemmassa kirjallisuudessa esitettyä teoreettista mallia. Essee osoittaa, että aiemmat tuloverotuksen indeksointia ja talouden avoimuuden vaikutusta optimaalisen palkkaindeksointiin koskevat tulokset eivät päde yleisempien oletusten vallitessa. Toisessa artikkelissa verojen korotusuhkauksella pyritään torjumaan palkkainflaatiota. Tarkasteltava aikaväli on yksi tulopoliittinen kierros. Tilanne kuvataan kertaluontoisena pelinä, jossa sekä verouhkaus että ammattiliittojen päätökset muotoutuvat. Tutkimus esittää yhden mahdollisen perustelun verouhkauksen menestykselliselle käytölle, ja siinä pohditaan myös syitä tämän keinon käytön harvinaisuuteen. Kolmannessa esseessä tutkitaan verotuksen ja tulonsiirtojen vaikutusta talouden tehokkuuteen ja hyvinvointiin. Kotitalouksien ja yritysten oletetaan täysin sopeuttaneen toimintansa verorakenteeseen. Palkat määräytyvät jäsenten enemmistöpäätöksillä työmarkkinat kattavassa monopoliliitossa. Tutkimus laajentaa tunnettua yleisen tasapainon numeerista simulointimallia ammattiliitolla. Tulosten mukaan verotuksen ja tulonsiirtojen vaikutukset talouteen riippuvat merkittävästi palkkojen muodostumistavasta.
  • Kulmala, Soile (Helsingin yliopisto, 2009)
    World marine fisheries suffer from economic and biological overfishing: too many vessels are harvesting too few fish stocks. Fisheries economics has explained the causes of overfishing and provided a theoretical background for management systems capable of solving the problem. Yet only a few examples of fisheries managed by the principles of the bioeconomic theory exist. With the aim of bridging the gap between the actual fish stock assessment models used to provide management advice and economic optimisation models, the thesis explores economically sound harvesting from national and international perspectives. Using data calibrated for the Baltic salmon and herring stocks, optimal harvesting policies are outlined using numerical methods. First, the thesis focuses on the socially optimal harvest of a single salmon stock by commercial and recreational fisheries. The results obtained using dynamic programming show that the optimal fishery configuration would be to close down three out of the five studied fisheries. The result is robust to stock size fluctuations. Compared to a base case situation, the optimal fleet structure would yield a slight decrease in the commercial catch, but a recreational catch that is nearly seven times higher. As a result, the expected economic net benefits from the fishery would increase nearly 60%, and the expected number of juvenile salmon (smolt) would increase by 30%. Second, the thesis explores the management of multiple salmon stocks in an international framework. Non-cooperative and cooperative game theory are used to demonstrate different "what if" scenarios. The results of the four player game suggest that, despite the commonly agreed fishing quota, the behaviour of the countries has been closer to non-cooperation than cooperation. Cooperation would more than double the net benefits from the fishery compared to a past fisheries policy. Side payments, however, are a prerequisite for a cooperative solution. Third, the thesis applies coalitional games in the partition function form to study whether the cooperative solution would be stable despite the potential presence of positive externalities. The results show that the cooperation of two out of four studied countries can be stable. Compared to a past fisheries policy, a stable coalition structure would provide substantial economic benefits. Nevertheless, the status of the salmon stocks would not improve significantly. Fourth, the thesis studies the prerequisites for and potential consequences of the implementation of an individual transferable quota (ITQ) system in the Finnish herring fishery. Simulation results suggest that ITQs would result in a decrease in the number of fishing vessels, but enables positive profits to overlap with a higher stock size. The empirical findings of the thesis affirm that the profitability of the studied fisheries could be improved. The evidence, however, indicates that incentives for free riding exist, and thus the most preferable outcome both in economic and biological terms is elusive.
  • Eerola, Essi (2003)
    Ympäristöpolitiikan tärkein tehtävä on tuotannosta ja kulutuksesta aiheutuvien ulkoisvaikutusten korjaaminen. Julkisen vallan interventio ympäristöpolitiikan muodossa jakaa uudelleen hyvinvointia, ja on luonnollista, että ryhmät, joihin interventio kohdistuu, pyrkivät vaikuttamaan siihen. Samanlainen etujen ristiriita näkyy myös kansainvälisellä tasolla, jossa maiden kansalliset edut voivat olla ristiriidassa. Eräs etujen ristiriidan syy on ympäristön laadun julkishyödykeluonne. Väitöskirjani koostuu kolmesta esseestä, joissa tarkastelen, miten erilaisten tavoitteiden ja etujen ristiriita kansallisella ja kansainvälisellä tasolla vaikuttaa ympäristöpoliitikan muodostumiseen. Väitöskirjani ensimmäisessä esseessä tarkastelen hallituksen metsien suojelupolitiikkaa tilanteessa, jossa metsäteollisuus ja ympäristöjärjestö pyrkivät vaikuttamaan harjoitettavaan politiikkaan. Tulokseni osoittavat, että yleensä etujärjestöjen lobbaus johtaa siihen, että poliittisesti määräytyvä metsien suojelun taso poikkeaa yhteiskunnan kokonaishyvinvoinnin maksimoivasta suojelun tasosta. Näin käy erityisesti tilanteessa, jossa metsäteollisuuden tuotteet kulutetaan kotimaassa ja kohonneet tuotantokustannukset nostavat kulutuksen hintaa. Jos metsäteollisuuden tuotanto suuntautuu vientiin, kireä teollisuuden kilpailutilanne ulkomaisilla markkinoilla johtaa alhaisempaan metsien suojelun tasoon. Toinen essee käsittelee kansainvälisillä markkinoilla kilpailevien saastuttavien yritysten verotusta. Esseen ensimmäisen osan tarkastelussa on kaksi maata ja molemmissa maissa yksi saastuttava yritys. Toisessa osassa tuotanto on ylikansallista. Analyysi vahvistaa aiemmin saadut tulokset, että kansallisten saastuttavien yritysten verotus on liian löysää. Analyysin tulokset ovat kuitenkin hyvin erilaiset silloin, kun saastuttavat yritykset ovat ylikansallisia. Tällöin hallitusten harjoittama veropolitiikka on liian tiukkaa: hyvinvointi kasvaisi molemmissa maissa, jos verotusta kevennettäisiin. Tähän on kaksi syytä. Ensinnä, keskeinen syy ns. ympäristödumppaamiseen, kun yritykset ovat kansallisia, on insentiivi käyttää ympäristöpolitiikkaa myös kauppapoliittisiin tavoitteisiin. Kun yritykset ovat ylikansallisia, se ei ole mahdollista. Toiseksi, kun tuotanto on ylikansallista, hallitusten verotuksen piirissä on tuotantolaitoksia, jotka ovat ainakin osittain ulkomaisessa omistuksessa. Molemmat mainitut syyt johtavat tiukempaan ympäristöpolitiikkaan. Väitöskirjani kolmas essee käsittelee ympäristöpolitiikan vaikutusta yritysten kansainvälistymiseen tilanteessa, jossa hallitukset eivät voi kansainvälisten vapaakauppasopimusten takia käyttää perinteisiä kauppapolitiikan instrumentteja. Tämä kysymys on tärkeä mm. sen kannalta, pitäisikö kansanvälisissä sopimuksissa sopia yhtäaikaisesti sekä kauppa- että ympäristöpolitiikasta. Käytän analyysiin kahden maan mallia, jossa yritykset ovat kansallisia, hallitus verottaa ympäristölle haitallisia päästöjä ja yrityksillä on mahdollisuus sulkea tuotantolaitos kotimaassa ja investoida uuteen tuotantolaitokseen ulkomailla. Esseen päätulos on, että vapaakauppasopimukset lisäävät yritysten halukkuutta investoida ulkomaille.
  • Eerola, Essi (2003)
    In the three essays of my thesis, I analyse the design of environmental policy taking into account that agents may take actions to influence policy-making. The main questions of interest are how the policy outcome is shaped by the interaction of agents and how it depends on the prevailing institutional setting. By comparing the outcome to policies that are, in some sense, socially optimal, one can then also identify the sources of inefficiencies in actual policy-making. In the first essay, I analyse the design of government forest policies under the influence of an industrial and environmental lobby. The results indicate that distortions from social optimum are large if the industrial lobby is more efficient in lobbying than the environmental lobby and the product of the forest industry is consumed domestically. Forest conservation will also be insufficient from the social point of view when the group of politically passive consumers is large even if the environmental lobby is more efficient. The design of national environmental policy in the presence of multinational firms is studied in the second essay. Existing literature shows that when firms are national, environmental policy tends to be distorted in favour of domestic producers. Extending this literature to the case of multinational production shows that this is not the case when polluting firms are multinational. The reason is two-fold: First, changes in environmental policy do not influence the market share of the domestic firm. Second, existence of foreign owned production plants creates an incentive to tax profits accruing to foreign shareholders. In the third essay, I study how international free trade agreements influence multinational production. I focus on the indirect effects of trade agreements through changes in the design of national environmental policy. The main result is that an introduction of a free trade agreement increases the attractiveness of multinational production. This result suggests that in assessing the welfare-effects of trade agreements it is important to take into account their influence on environmental policy.