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This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.The paper provides an analysis and discussion of key structural implications of the 2007 and 2008 welfare and tax reforms in the Czech Republic. Based on a detailed micro-study of marginal and average effective tax rates for individuals at various points along the earnings curve, it concludes that while incentives to save and invest have improved, work incentives are being severely hampered by high marginal effective tax rates for low-and middle income individuals. The reforms also fail to address the most pressing fiscal concern: to put government finances on a sustainable path.

Ongoing Changes in the Business Cycle-Evidence and Causes This paper first reviews a number of stylised facts concerning OECD country business cycles over the past four decades. In general, the amplitude of business cycles has fallen, driven mainly by declining fluctuations of domestic demand. As a result, international divergencies of cyclical positions have diminished but, outside the euro area, there is little evidence of increased synchronisation of cycles. The paper then reviews a number of influences on business cycles. The evidence suggests that, on balance, features of macroeconomic policies may have tended to reduce cyclical volatility and structural changes, notably the increased share of the service sector in the economies, have also tended to dampen the cycle. More recently, there are signs that financial market prices have increasingly moved in sympathy across countries, and the final section of the paper illustrates how this could affect the international transmission of cyclical shocks and the associated need for policy response.

This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and should not be attributed to the IMF, its Executive Board, or its management. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.The structure of Japan's corporate income tax system is broadly in line with those of other G7 countries. However, relatively high marginal and average effective tax rates prompt the question of whether adjustments should be considered to meet the objectives of promoting growth, investment and competitiveness in a revenue neutral manner. This paper discusses key issues and trade-off's related to changes in the corporate income tax system. It does not provide recommendations, but raises issues that could hopefully serve as useful inputs to the ongoing discussion and tax debate in Japan. JEL Classification Numbers: H25

One of the OECD Economic Department’s key vehicles for analysing effects and international spillovers of macroeconomic policy as well as assessing risks to the global outlook is the macroeconometric model, INTERLINK. In the context of the Department’s regular projection exercises the model performs a variety of functions. These include 1 ) contributing to the construction and co-ordination of individual country projections; 2 ) the production of globally consistent trade projections; and 3 ) simulations to explore the short- to medium-term consequences of alternative economic conditions and policy assumptions. This paper briefly describes the main features of the current version of INTERLINK and presents the results of a number of standard macroeconomic shocks. These simulation results reflect the combination of unadjusted model properties and the specific stylised policy assumptions made. In the course of more routine policy analysis with the model at the OECD, these are augmented by ... Le modèle macro-économétrique INTERLINK est l’un des principaux outils du Département des affaires économiques de l’OCDE pour analyser les effets directs et les répercussions internationales des politiques économiques et pour évaluer les risques pesant sur les perspectives globales. Dans le cadre des exercices réguliers de prévision, le modèle remplit diverses fonctions parmi lesquelles : 1 ) contribuer à la construction et à la coordination des prévisions de chaque pays; 2 ) produire des prévisions du commerce international globalement cohérentes; et 3 ) réaliser des simulations pour explorer les conséquences à court et à moyen terme de différentes hypothèses sur l’environnement économique et les politiques économiques. Ce document de travail décrit brièvement les principales caractéristiques de la version actuelle d’INTERLINK et présente les résultats de chocs macro-économiques standards. Ces résultats de simulations reflètent à la fois les propriétés intrinsèques du modèle et des ...macroeconometric model, forecasting, simulation, modèle macroéconométrique, simulation, perspectives