A Tale of Tax Policies in Open Economies
Résumé
To evaluate fiscal policy reforms for Euro-area countries, this article develops and calibrates a small open economy model. Debt reduction reforms require higher tax rates in the short term in exchange for lower rates in the long term as the debt-servicing burden falls. Using the capital income tax to implement such a policy leads to welfare gains; the consumption tax, a very small welfare gain; and the labor income tax, a welfare loss. Holding fixed the long-run debt-output ratio, offsetting a lower capital income tax with either a higher labor income or consumption tax generally yields welfare gains.
Domaines
Economies et financesFormat du dépôt | Notice |
---|---|
Type de dépôt | Article dans une revue |
Résumé |
en
To evaluate fiscal policy reforms for Euro-area countries, this article develops and calibrates a small open economy model. Debt reduction reforms require higher tax rates in the short term in exchange for lower rates in the long term as the debt-servicing burden falls. Using the capital income tax to implement such a policy leads to welfare gains; the consumption tax, a very small welfare gain; and the labor income tax, a welfare loss. Holding fixed the long-run debt-output ratio, offsetting a lower capital income tax with either a higher labor income or consumption tax generally yields welfare gains.
|
Titre |
en
A Tale of Tax Policies in Open Economies
|
Auteur(s) |
Stéphane Auray
1
, Aurélien Eyquem
2
, Paul Gomme
3
1
CREST -
Centre de Recherche en Économie et Statistique
( 2579 )
- 5, Avenue Henry Le Chatelier, 91120 Palaiseau
- France
2
GATE Lyon Saint-Étienne -
Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne
( 102550 )
- 93, chemin des Mouilles 69130 Écully
6, rue Basse des Rives 42023 Saint-Étienne cedex 02
- France
3
CIREQ -
Centre interuniversitaire de recherche en économie quantitative
( 178230 )
- Centre interuniversitaire de recherche en économie quantitative Université de Montréal Pavillon Lionel-Groulx 3150, rue Jean-Brillant, local C-6088 Montréal (Québec) H3T 1N8
- Canada
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Page/Identifiant |
1299–1333
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Langue du document |
Anglais
|
Date de production/écriture |
2016
|
Nom de la revue |
|
Vulgarisation |
Non
|
Comité de lecture |
Oui
|
Audience |
Internationale
|
Date de publication |
2016
|
Volume |
57
|
Numéro |
4
|
Domaine(s) |
|
Mots-clés (JEL) |
|
Mots-clés |
en
tax reforms, public deficits, open economies, Fiscal policies
|
DOI | 10.1111/iere.12199 |
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