This paper examines the impact of uncertainty on offshoring low-skilled tasks. The model shows that greater demand uncertainty adversely affects the expected profit and timing of offshoring. It is also shown that a home country tax rate deduction increases the volatility of the expected profits, making offshoring appear to be more risky. One policy implication of our results is that, in order to delay relocation of MNE's production from the home country, a government should adopt tax rate deduction rather than a direct subsidy because the former is more economical and effective than the latter.JEL Classification: F23; D81; G38

This paper examines the relationship between household's house prices perception and the size of the household debt, using data from the first wave of the Household Finance and Consumption Survey. While the existing literature has focused mainly on the effects of housing wealth on consumption, we concentrate on debt levels, distinguishing mortgage debt from non-mortgage debt, and investigating over-indebtedness. Different measures of housing wealth appraisal are considered, controlling for tenure years. The findings reveal that housing wealth effects differ by type of loans and with the measure of housing wealth. Over-indebtedness is driven by the same factors that determine mortgage debt, suggesting a strong association between having outstanding liabilities from the primary residence and the risk of entering into default. Further estimations by different income and wealth levels revealed dissimilar housing wealth effects on the level of households' outstanding liabilities, the size of non-mortgage debt tending to raise with lower income and the level of accumulated over-debt tending to be larger among the wealthier.

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The pressure from national lobbies may lead governments to shift from an optimal into a non-optimal innovation policy. This paper examines the growth and welfare effects of optimal and non-optimal innovation policies. The non-optimal policy corresponds to a subsidy for national innovators that is equivalent to an optimal policy of incentives (tax cuts) to foreign investors. Since we are assessing what can nationals do with the support that could be oriented to foreign firms, we are measuring what the economy loses for not supporting foreign firms. We find welfare loss when supporting national R&D instead of foreign R&D. We conclude that the same support given to innovation can produce strikingly different outcomes depending on who receives the support.JEL Classification: F21; H21; O40.