Tax Policy Implications In Endogenous Growth Models

Author : Bin Xu
Publisher : International Monetary Fund
Page : 40 pages
File Size : 49,9 Mb
Release : 1994-03-01
Category : Business & Economics
ISBN : 9781451977554

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Tax Policy Implications in Endogenous Growth Models by Bin Xu Pdf

This paper surveys the tax policy implications in various endogenous growth models. The focus is on the long-run growth effects of income, consumption, and investment taxation in models whose engine of growth is the accumulation of human capital, technological innovation, and/or public infrastructure. The results depend on model specifications. This paper also reviews quantitative results from cross-country regressions and simulations, and indicates some statistical and methodological problems to which they are subject. Tax policy implications in endogenous growth models both with tax policy endogenously determined by a political process and with international capital mobility are also discussed.

Author : Mr.Vito Tanzi,Mr.Howell H. Zee
Publisher : International Monetary Fund
Page : 36 pages
File Size : 42,9 Mb
Release : 1996-10-01
Category : Business & Economics
ISBN : 9781451854121

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Fiscal Policy and Long-Run Growth by Mr.Vito Tanzi,Mr.Howell H. Zee Pdf

This paper discusses in a systematic and comprehensive way the existing literature on the relationship between the growth of countries’ economies and various public finance instruments, such as tax policy, expenditure policy, and overall budgetary policy, from the perspectives of allocative efficiency, macroeconomic stability, and income distribution. It reviews both the conceptual linkages between each of the instruments and growth and the empirical evidence on such relationships. It broadly concludes that fiscal policy could play a fundamental role in affecting the long-run growth performance of countries.

Author : Mr.Gian Milesi-Ferretti,Nouriel Roubini
Publisher : International Monetary Fund
Page : 37 pages
File Size : 42,7 Mb
Release : 1994-07-01
Category : Business & Economics
ISBN : 9781451849943

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Taxation and Endogenous Growth in Open Economies by Mr.Gian Milesi-Ferretti,Nouriel Roubini Pdf

This paper examines the effects of taxation of human capital, physical capital and foreign assets in a multi-sector model of endogenous growth. It is shown that in general the growth rate is reduced by taxes on capital and labor (human capital) income. When the government faces no borrowing constraints and is able to commit to a given set of present and future taxes, it is shown that the optimal tax plan involves high taxation of both capital and labor in the short run. This allows the government to accumulate sufficient assets to finance spending without any recourse to distortionary taxation in the long run. When restrictions to government borrowing and lending are imposed, the model implies that human and physical capital should be taxed similarly.

Author : Mr.Howell H. Zee
Publisher : International Monetary Fund
Page : 34 pages
File Size : 55,8 Mb
Release : 1994
Category : Business & Economics
ISBN : UCSD:31822016816134

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Endogenous Time Preference and Endogenous Growth by Mr.Howell H. Zee Pdf

The present paper develops a one-sector aggregate endogenous growth model with intertemporal preference dependence. The resultant model possesses the fundamental property of growth convergence, in the sense that countries with identical parameters regarding technology, preference, and government policy will converge to a steady state with the same (positive) growth rate. A notable tax policy implication of the model is that, even in the absence of externalities, the growth effects of an income tax are shown to be a priori ambiguous and dependent on the relative magnitudes of the tax rate and the tax elasticity of the savings rate.

Author : Mr.Gian Milesi-Ferretti,Nouriel Roubini
Publisher : International Monetary Fund
Page : 38 pages
File Size : 49,6 Mb
Release : 1995-07-01
Category : Business & Economics
ISBN : 9781451848236

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Growth Effects of Income and Consumption Taxes by Mr.Gian Milesi-Ferretti,Nouriel Roubini Pdf

The effects of income and consumption taxation are examined in the context of models in which the growth process is driven by the accumulation of human and physical capital. The different channels through which these taxes affect economic growth are discussed, and it is shown that in general the taxation of factor incomes (human and physical capital) is growth-reducing. The effects of consumption taxation on growth depend crucially on the elasticity of labor supply, and therefore on the specification of the leisure activity. The paper also derives some implications for the optimal intertemporal choice of tax instruments.

Author : Mr.Gian Milesi-Ferretti,Mr.Enrique G. Mendoza,Patrick K. Asea
Publisher : International Monetary Fund
Page : 42 pages
File Size : 43,5 Mb
Release : 1995-08-01
Category : Business & Economics
ISBN : 9781451955798

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Do Taxes Matter for Long-Run Growth? Harberger's Superneutrality Conjecture by Mr.Gian Milesi-Ferretti,Mr.Enrique G. Mendoza,Patrick K. Asea Pdf

Harberger’s superneutrality conjecture contends that, although in theory the mix of direct and indirect taxes affects investment and growth, in practice growth effects of taxation are negligible. This paper provides evidence in support of this view by testing the predictions of endogenous growth models driven by human capital accumulation. The theoretical analysis highlights implications of different taxes for growth and investment in these models. The empirical work is based on cross-country regressions and numerical simulations, using a new methodology for estimating aggregate effective tax rates. Results show significant investment effects from income and consumption taxes that are consistent with small growth effects. The results are robust to the introduction of other growth determinants.

Author : Mr.Paul Cashin
Publisher : International Monetary Fund
Page : 36 pages
File Size : 45,7 Mb
Release : 1994-08-01
Category : Business & Economics
ISBN : 9781451951479

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Government Spending, Taxes, and Economic Growth by Mr.Paul Cashin Pdf

This paper develops an endogenous growth model of the influence of public investment, public transfers, and distortionary taxation on the rate of economic growth. The growth-enhancing effects of investment in public capital and transfer payments are modeled, as is the growth-inhibiting influence of the levying of distortionary taxes which are used to fund such expenditure. The theoretical implications of the model are then tested with data from 23 developed countries between 1971 and 1988, and time series cross sectional results are obtained which support the proposed influence of the public finance variables on economic growth.

Author : Harald Hagemann,Stephan Seiter
Publisher : Routledge
Page : 286 pages
File Size : 51,5 Mb
Release : 2003-03-06
Category : Business & Economics
ISBN : 9781134510900

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Growth Theory and Growth Policy by Harald Hagemann,Stephan Seiter Pdf

This collection examines the phenomenon of economic growth with admirable economic vigour and includes contributions from leading academic figures. Theoretical approaches, underpinned by original empirical work, will make this a book welcomed by students and academics of macroeconomics and growth theory.

Author : Alfred Greiner,Willi Semmler,Gang Gong
Publisher : Princeton University Press
Page : 208 pages
File Size : 45,9 Mb
Release : 2016-06-28
Category : Business & Economics
ISBN : 9781400880157

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The Forces of Economic Growth by Alfred Greiner,Willi Semmler,Gang Gong Pdf

In economics, the emergence of New Growth Theory in recent decades has directed attention to an old and important problem: what are the forces of economic growth and how can public policy enhance them? This book examines major forces of growth--including spillover effects and externalities, education and formation of human capital, knowledge creation through deliberate research efforts, and public infrastructure investment. Unique in emphasizing the importance of different forces for particular stages of development, it offers wide-ranging policy implications in the process. The authors critically examine recently developed endogenous growth models, study the dynamic implications of modified models, and test the models empirically with modern time series methods that avoid the perils of heterogeneity in cross-country studies. Their empirical analyses, undertaken with newly constructed time series data for the United States and some core countries of the Euro zone, show that models containing scale effects, such as the R&D model and the human capital model, are compatible with time series evidence only after considerable modifications and nonlinearities are introduced. They also explore the relationship between growth and inequality, with particular focus on technological change and income disparity. The Forces of Economic Growth represents a comprehensive and up-to-date empirical time series perspective on the New Growth Theory.

Author : Norman Gemmell
Publisher : Unknown
Page : 38 pages
File Size : 47,9 Mb
Release : 2001
Category : Economic development
ISBN : IND:30000129849927

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Fiscal Policy in a Growth Framework by Norman Gemmell Pdf

Author : Andrew Hodge
Publisher : International Monetary Fund
Page : 50 pages
File Size : 48,9 Mb
Release : 2016-07-22
Category : Business & Economics
ISBN : 9781498382199

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The Design of Fiscal Reform Packages by Andrew Hodge Pdf

This paper studies the impact on growth, welfare, and government debt of fiscal reform packages in a theoretical model drawing together three key features of the endogenous growth literature: (i) investment in technology (in the form of human capital) offsets diminishing marginal productivity of private capital, allowing for perpetual growth in output per capita; (ii) changes in investment behavior because of cuts to distortionary tax rates impact long-run growth; and (iii) public capital has a role influencing total factor productivity and growth. A quantitative simulation using reasonable parameter values suggests that modest capital and/or labor income tax cuts and public investment increases have significant positive effects on consumer welfare but small effects on per capita income growth, where fiscal costs are offset by reductions in unproductive government spending. Capital income tax cuts and public investment increases continue to boost welfare when offset by consumption tax rises (rather than spending cuts), although the welfare benefits of modest labor income tax cuts are outweighed by the costs of a compensating consumption tax increase.

Author : Frank Hettich
Publisher : Edward Elgar Publishing
Page : 296 pages
File Size : 40,7 Mb
Release : 2000
Category : Business & Economics
ISBN : STANFORD:36105025185708

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Economic Growth and Environmental Policy by Frank Hettich Pdf

Focusing on the effects of environmental policy in closed and open economies in the short, medium and long term, this book uses dynamic modelling to study the interactions between economic growth, environmental policy and tax reform.

Author : Andreas Bergh,Magnus Henrekson
Publisher : Rowman & Littlefield
Page : 82 pages
File Size : 51,6 Mb
Release : 2010
Category : Economic development
ISBN : 9780844743530

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Government Size and Implications for Economic Growth by Andreas Bergh,Magnus Henrekson Pdf

As economists and policymakers strive to understand the causes of the global financial crisis, pinpointing the relationship between government size and economic growth is crucial. In this incisive economic study, Andreas Bergh and Magnus Henrekson find that in wealthy countries, where government size is measured as total taxes or total expenditure relative to GDP, there is a strong negative correlation between government size and economic growth-where government size increases by 10 percentage points, annual growth rates decrease by 0.5 to 1 percent. Bergh and Henrekson stress that statistical correlations, even when highly significant, are not law. Some countries with high taxes enjoy above-average growth, and some countries with small governments have stagnant economies. The Scandinavian welfare states, for example, have enjoyed steady growth over the last decade despite their large governments. However, these nations compensate for high taxes by employing market-friendly policies in other areas, such as trade openness and inflation control. Government Size and Economic Growth concludes that, in every case, economic freedom is a crucial determinant of economic growth_suggesting that government intervention in the marketplace may be the wrong approach to solving the economic crisis.

Author : Alfonso Novales,Esther Fernández,Jesús Ruiz
Publisher : Springer
Page : 568 pages
File Size : 46,5 Mb
Release : 2014-07-02
Category : Business & Economics
ISBN : 9783642549502

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Economic Growth by Alfonso Novales,Esther Fernández,Jesús Ruiz Pdf

This is a book on deterministic and stochastic Growth Theory and the computational methods needed to produce numerical solutions. Exogenous and endogenous growth models are thoroughly reviewed. Special attention is paid to the use of these models for fiscal and monetary policy analysis. Modern Business Cycle Theory, the New Keynesian Macroeconomics, the class of Dynamic Stochastic General Equilibrium models, can be all considered as special cases of models of economic growth, and they can be analyzed by the theoretical and numerical procedures provided in the textbook. Analytical discussions are presented in full detail. The book is self contained and it is designed so that the student advances in the theoretical and the computational issues in parallel. EXCEL and Matlab files are provided on an accompanying website (see Preface to the Second Edition) to illustrate theoretical results as well as to simulate the effects of economic policy interventions. The structure of these program files is described in "Numerical exercise"-type of sections, where the output of these programs is also interpreted. The second edition corrects a few typographical errors and improves some notation.

Author : Ramesh Chandra
Publisher : Springer Nature
Page : 336 pages
File Size : 51,8 Mb
Release : 2021-11-24
Category : Business & Economics
ISBN : 9783030837617

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Endogenous Growth in Historical Perspective by Ramesh Chandra Pdf

In recent decades, new endogenous growth theory has become popular but the ideas are not new. They go back at least as far as Adam Smith, and the subsequent contributions made notably by Alfred Marshall and Allyn Young. This book critically discusses and provides an historical perspective to the entire spectrum of endogenous growth theories starting with Adam Smith and ending with Paul Romer. It fills an important gap in the literature. While contributions of individual authors are readily available, there is no comprehensive study on the subject covering such a vast ground, critically discussing these authors in a comprehensive framework. It collates all the arguments and economic viewpoints in one collection, providing both the seasoned economist and a graduate economist with a critical comparison of origin, mechanisms, conclusions, and policy implications of these models.