Revenue Neutral Value Added Tax (VAT) in Bangladesh : Some General Equilibrium Illustrations
Author: Osman Haider Chowdhury
A small open economy general equilibrium model for Bangladesh has been used to numerically estimate the welfare and distributional consequences of value-added tax (VAT) and excise taxes of equal yield. The results show that poorer households are adversely affected by both uniform and proportional VAT or excises because of relative shifts and the static changes took place through demand responses in consumption. One of the central findings is that it is desirable to have 2 or 3 rate structures
Determinants of Export Performance of Bangladesh
Author: Dilip Kumar Roy
This study is an attempt to analyse the factors responsible for export performance involving both supply inelasticity hypothesis and demand deficiency approach of trade. The study follows some previous empirical work (Lewis 1980; Riedel 1988) in this area. World demand (developed/developing market economy’s demand) and relative export price affect export performance from the demand side while the variables like effective rate of assistance (ERA), exchange rate, non-price factor (process of learning), government policies, export diversification are considered to be supply side influences on export growth. The paper demonstrates that world demand is an important determinant of export performance. The competitiveness of Bangladesh exports in the world market may be influenced by exchange rate trade-weighted exchange rate and effective rate of assistance are found to be significantly positive. The positive and significant coefficient of dummy variable in the exchange rate indicates that devaluation has some positive effect on the export performance of Bangladesh. The coefficient of efficiency index is found to be positive in most cases. There is a strong indication of positive effect of non-price factors on export growth. Lastly, the export performance of Bangladesh has been found to be associated with greater commodity diversification of exports. Bangladesh tends to maintain its greater share of world exports when the international demand changes towards commodity composition.
Self-selection and Earnings: A Cross Section Analysis of U.S. Immigrants
Author: M. Azizur Rahman
Using data from the 1-in-100 sample of 1980 U.S. Census of Population for California and New York, this study analyzes the self-selection-corrected earnings of immigrants of three major ancestral groups- Europeans, Asians, and Hispanics-vis-a-vis their native-born counterparts in the U.S. The earnings of immigrants are overestimated if not properly corrected for their self-selectivity. All three major groups of immigrants have lower average earnings than those of their U.S. born counterparts due to immigrants’ lower returns to human capital than to lower levels of human capital. After correcting for selectivity bias, Asian immigrants have a slight advantage over European immigrants in both earnings characteristics and returns to these characteristics. Both the absolute and relative earnings of Hispanic immigrants are lower than those of Asian and European immigrants, and this differential is largely due to Hispanics’ smaller amount of human capital.