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We use a novel dataset on effective property tax rates in U.S. states and metropolitan statistical areas (MSAs) over the 2005–2014 period to analyze the relationship between property tax rates and house price volatility. We find that property tax rates have a negative impact on house price volatility. The impact is causal, with increases in property tax rates leading to a reduction in house price volatility. The results are robust to different measures of house price volatility, estimation methodologies, and additional controls for housing demand and supply. The outcomes of the analysis have important policy implications and suggest that property taxation could be used as an important tool to dampen house price volatility.

Property tax --- Housing --- Prices --- E-books --- Econometrics --- Infrastructure --- Real Estate --- Taxation --- State and Local Taxation, Subsidies, and Revenue --- Urban, Rural, and Regional Economics: Housing Demand --- Housing Supply and Markets --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Economic Development: Urban, Rural, Regional, and Transportation Analysis --- Taxation, Subsidies, and Revenue: General --- Estimation --- Property & real estate --- Macroeconomics --- Public finance & taxation --- Econometrics & economic statistics --- Housing prices --- Effective tax rate --- Estimation techniques --- Taxes --- National accounts --- Tax policy --- Econometric analysis --- Saving and investment --- Tax administration and procedure --- Econometric models --- United States

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We analyze determinants of sovereign bond yields in 22 advanced economies over the 1980-2010 period using panel cointegration techniques. The application of cointegration methodology allows distinguishing between long-run (debt-to-GDP ratio, potential growth) and short-run (inflation, short-term interest rates, etc.) determinants of sovereign borrowing costs. We find that in the long-run, government bond yields increase by about 2 basis points in response to a 1 percentage point increase in government debt-to-GDP ratio and by about 45 basis points in response to a 1 percentage point increase in potential growth rate. In the short-run, sovereign bond yields deviate from the level determined by the long-run fundamentals, but about half of the deviation adjusts in one year. When considering the impact of the global financial crisis on sovereign borrowing costs in euro area countries, the estimations suggest that spreads against Germany in some European periphery countries exceeded the level determined by fundamentals in the aftermath of the crisis, while some North European countries have benefited from “safe haven” flows.

Finance --- Business & Economics --- Investment & Speculation --- Government securities --- Rate of return --- Cointegration. --- Econometric models. --- Government agency securities --- Government bonds --- Public securities --- Treasuries (Securities) --- Treasury bonds --- Investment return --- Investment yield --- Return on equity --- Return on investment --- ROI (Rate of return) --- Econometrics --- Bonds --- Debts, Public --- Securities --- Capital investments --- Profit --- Ratio analysis --- Risk-return relationships --- Cointegration --- Econometric models --- E-books --- Banks and Banking --- Investments: Bonds --- Macroeconomics --- Public Finance --- 'Panel Data Models --- Spatio-temporal Models' --- Interest Rates: Determination, Term Structure, and Effects --- General Financial Markets: General (includes Measurement and Data) --- Debt --- Debt Management --- Sovereign Debt --- Fiscal Policy --- Investment & securities --- Public finance & taxation --- Bond yields --- Yield curve --- Sovereign bonds --- Public debt --- Fiscal stance --- Financial institutions --- Financial services --- Fiscal policy --- Interest rates --- United States --- Panel Data Models --- Spatio-temporal Models

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This paper explores how corporate taxes affect the financial structure of multinational banks. Guided by a simple theory of optimal capital structure it tests (i) whether corporate taxes induce subsidiary banks to raise their debt-asset ratio in light of the traditional debt bias; and (ii) whether international corporate tax differentials vis-a-vis foreign subsidiary banks affect the intra-bank capital structure through international debt shifting. Using a novel subsidiary-level dataset for 558 commercial bank subsidiaries of the 86 largest multinational banks in the world, we find that taxes matter significantly, through both the traditional debt bias channel and the international debt shifting that is due to the international tax differentials. The latter channel is more robust and tends to be quantitatively more important. Our results imply that taxation causes significant international debt spillovers through multinational banks, which has potentially important implications for tax policy.

Political Science --- Law, Politics & Government --- Public Finance --- Taxation --- Financial leverage --- Econometric models. --- Leverage, Financial --- Finance --- Econometric models --- E-books --- Banks and Banking --- Financial Risk Management --- Corporate Taxation --- Personal Finance -Taxation --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Business Taxes and Subsidies --- Financial Institutions and Services: Government Policy and Regulation --- Financial Crises --- Taxation, Subsidies, and Revenue: General --- Personal Income and Other Nonbusiness Taxes and Subsidies --- Banking --- Corporate & business tax --- Economic & financial crises & disasters --- Public finance & taxation --- Corporate income tax --- Deposit insurance --- Financial crises --- Debt bias --- Taxes --- Tax policy --- Tax allowances --- Banks and banking --- Corporations --- Crisis management --- Tax administration and procedure --- Income tax --- United States