scholarly journals Financial deepening in a two-sector endogenous growth model with productivity heterogeneity

2019 ◽  
Vol 20 (1) ◽  
Author(s):  
Quoc Hung Nguyen
Keyword(s):  
Working Hours ◽  
Tax Rates ◽  
Financial Deepening ◽  
Human Capital Formation ◽  
Tax Rate ◽  
Balanced Growth ◽  
Theoretical Predictions ◽  
Endogenous Growth Model ◽  
Capital Tax ◽  
Balanced Growth Path

AbstractThis paper studies the effects of financial deepening and fiscal policy on human capital formation, working hours and growth in a model with financial frictions and productivity heterogeneity. The paper first shows that in the range of capital tax rates that attains a balanced growth path, taxation exerts inverted U-shaped effects on growth. The paper then analytically derives and shows that the growth maximizing tax rate and the corresponding growth are increasing concave functions of the financial deepening level. Finally, it is shown that theoretical predictions of the model are in line with data from OECD countries.

scholarly journals An evaluation of the revenue side as a source of fiscal consolidation in high debt economies

2014 ◽  
Vol 41 (6) ◽  
pp. 771-788
Author(s):  
Ritwik Banerjee
Keyword(s):  
General Equilibrium ◽  
Tax Rates ◽  
Consumption Tax ◽  
Policy Makers ◽  
Revenue Generation ◽  
Content Type ◽  
Tax Rate ◽  
Labor Tax ◽  
Capital Tax ◽  
European Economies

Purpose – Unsustainable levels of debt in some European economies are causing enormous strain in the Euro area. Successful debt consolidation in high-debt economies is the single most important objective for the European policy makers. The paper aims to discuss these issues. Design/methodology/approach – The author uses a dynamic general equilibrium closed economy model to compute the dynamic Laffer curves for Portugal, Ireland, Greece and Spain for different class of taxes. The general equilibrium effects of the interaction of labor tax, consumption tax and capital tax is demonstrated. Findings – Location of each economy on its Laffer curve suggests that there exists a scope for considerable revenue generation by raising consumption and labor tax rates but no such possibilities exist for capital tax rate. Thus revenue generation with certain tax rates as instruments, holds key to successful and sustained debt reduction. Originality/value – This to the best of knowledge is one of the first papers which looks closely at the tax revenue – tax rate panel for the major deeply indebted European economies.

Tax Harmonization and Expenditure Competition among Self-interested Governments

2004 ◽  
Vol 22 (1) ◽  
pp. 33-52
Author(s):  
Claudia Hensberg
Keyword(s):  
Financial Incentive ◽  
Tax Rates ◽  
Tax Rate ◽  
Public Input ◽  
Tax Harmonization ◽  
Capital Tax

Abstract In this paper the effect of tax harmonization on intergovernmental expenditure competition is analysed. To this end, it is assumed that self-interested governments cannot influence tax rates, since taxes are harmonized, but that they can freely choose expenditure policies and, by this, attract additional capital and broaden the assessment base of a capital tax. Hence, self-interested governments might have a financial incentive to provide for public input besides re-election oriented motivations. Since additional tax income from public input provision depends on the harmonized capital tax rate, the choice of the tax rate indirectly determines the amount of public input supplied by governments in expenditure competition.

scholarly journals Tax Competition and Asymmetric Countries

Ekonomika ◽  
2004 ◽  
Vol 68 ◽  
Author(s):  
Anton Jevcak
Keyword(s):  
Open Economy ◽  
Small Open Economy ◽  
National Income ◽  
Tax Rates ◽  
Tax Rate ◽  
Eu Member States ◽  
Public Inputs ◽  
Tax Harmonisation ◽  
Capital Tax ◽  
The Government

This paper explores the consequences of a difference in the levels of public inputs accumulated over time in a small open economy model where capital tax revenues are used exclusively for the provision of public inputs, while the government sets the capital tax rate in way to maximise its country’s national income. It is shown that in this case the optimal capital tax rate in a country is a decreasing function of its stock of accumulated public inputs. The model thus implies that capital tax harmonisation could actually be detrimental to the so-called core EU member states as it could fix their capital tax rates at an in-optimally high levels and thus hinder their ability to dampen undesirable capital out- flows.

DYNAMICS OF TAXES, PUBLIC SERVICES, AND ENDOGENOUS GROWTH

2002 ◽  
Vol 6 (2) ◽  
pp. 187-201 ◽  
Author(s):  
Hyun Park ◽  
Apostolis Philippopoulos
Keyword(s):  
Endogenous Growth ◽  
Tax Rate ◽  
Long Run ◽  
Public Consumption ◽  
Finance Model ◽  
Optimal Policies ◽  
Capital Tax ◽  
Balanced Growth Path ◽  
Public Production ◽  
Long Run Equilibrium

We present a model of endogenous growth in which government consumption and production services are financed by distorting capital taxes. We generalize Barro's public finance model of growth in two ways. First, we study the properties, and the role in growth, of a wider menu of second-best optimal policies, namely, the capital tax rate and the portion of total tax revenues used to finance public production services versus public consumption services. Second, we investigate the possibility of the existence and uniqueness of a long-run equilibrium in which optimal policies do not change and the economy grows at a constant balanced growth path, as well as the possibility of dynamic determinacy of this long-run equilibrium.

Stochastic Growth and Factor Income Risk

2009 ◽  
Vol 10 (4) ◽  
pp. 422-447 ◽  
Author(s):  
Christiane Clemens
Keyword(s):  
Labor Supply ◽  
Labor Income ◽  
Growth Path ◽  
Income Risk ◽  
Balanced Growth ◽  
Labor Income Risk ◽  
Factor Income ◽  
Endogenous Growth Model ◽  
Balanced Growth Path ◽  
Competitive Economy

Abstract This paper examines the effects of aggregate factor income risk in a tractable version of the stochastic Romer endogenous growth model. Labor supply is endogenous. The presence of labor income risk unambiguously increases savings and growth due to precautionary motives. Households not only underaccumulate but also work less along the balanced growth path of the competitive economy when compared with the Pareto-efficient allocation. The paper also discusses distributive disturbances for the case of inelastic labor supply. Here, growth effects are negative for empirically plausible correlations of the underlying shocks.

scholarly journals Demographics and the Politics of Capital Taxation in a Life-Cycle Economy

2010 ◽  
Vol 100 (1) ◽  
pp. 337-363 ◽  
Author(s):  
Xavier Mateos-Planas
Keyword(s):  
Overlapping Generations ◽  
The United States ◽  
Tax Rates ◽  
Capital Taxation ◽  
Overlapping Generations Model ◽  
Tax Rate ◽  
Cycle Economy ◽  
Voting Age ◽  
Capital Tax ◽  
Markov Equilibrium

This article studies the effects of demographics on the mix of tax rates on labor and capital. It uses a quantitative general-equilibrium, overlapping-generations model where tax rates are voted without past commitments in every period and characterized as a Markov equilibrium. In the United States, the younger voting-age population in 1990 compared to 1965 accounts for the observed decline in the relative capital tax rate between those two years. A younger population raises the net return to capital, leads voters to increase their savings, and results in a preference for lower taxes on capital. Conversely, aging might increase capital taxation. (JEL E13, H24, H25, J11)

Economic Growth, Public Debt and Welfare: Comparing Three Budgetary Rules

2011 ◽  
Vol 12 (2) ◽  
pp. 205-222 ◽  
Author(s):  
Alfred Greiner
Keyword(s):  
Public Debt ◽  
Public Spending ◽  
Budget Constraint ◽  
Growth Path ◽  
Balanced Growth ◽  
Long Run ◽  
Endogenous Growth Model ◽  
Balanced Growth Path ◽  
Balanced Budget ◽  
Elastic Labor Supply

Abstract We present an endogenous growth model with externalities of capital and elastic labor supply where we allow for public debt and welfare-enhancing public spending. We analyze different debt policies as regards convergence to a balanced growth path and their effects on long-run growth and welfare. Three budgetary rules are considered: the balanced budget rule, a budgetary rule where debt grows in the long run but at a rate lower than the balanced growth rate and a rule where public debt grows at the same rate as all other economic variables but where it guarantees that the intertemporal budget constraint is fulfilled.

GROWTH AND FIRM DYNAMICS WITH HORIZONTAL AND VERTICAL R&D

2013 ◽  
Vol 17 (7) ◽  
pp. 1438-1466 ◽  
Author(s):  
Pedro Mazeda Gil ◽  
Paulo Brito ◽  
Oscar Afonso
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Firm Dynamics ◽  
Growth Path ◽  
Economic Growth Rate ◽  
Balanced Growth ◽  
Composition Effects ◽  
Endogenous Growth Model ◽  
Balanced Growth Path ◽  
Empirical Growth

A negative or nonsignificant empirical correlation between aggregate R&D intensity and the economic growth rate is a well-known fact in the empirical growth literature, but scarcely addressed in the theoretical growth literature. This paper develops an endogenous-growth~model that explores the interrelation~between horizontal and vertical R&D under a lab-equipment specification that is consistent with that stylized fact. A key feature is that the growth rate is fully endogenous both on the intensive and on the extensive margin. Strong composition effects between horizontal and vertical R&D, along both transition and the balanced-growth path, then emerge as the main mechanism producing those results. This setting also allows us to obtain a relationship between economic growth and firm dynamics that is consistent with the empirical facts.

Multi-component complex ores: Special aspects of using ad valorem and specific mineral extraction tax rates

2020 ◽  
Vol 26 (6) ◽  
pp. 1297-1314
Author(s):  
T.A. Loginova
Keyword(s):  
Krasnoyarsk Krai ◽  
Tax Rates ◽  
Russian Regions ◽  
Rent Extraction ◽  
Effective Tax Rate ◽  
Mineral Extraction ◽  
Tax Rate ◽  
Significant Differentiation ◽  
The Russian Federation ◽  
Ad Valorem

Subject. This article discusses the issues related to the taxation for multi-component complex ores and commercial components using ad valorem and specific mineral extraction tax (MET) rates. Objectives. The article aims to assess some results of the application of specific MET rates in the Krasnoyarsk Krai and ad valorem rates in other subjects of the Russian Federation, taking into account the specifics of the current taxation procedure for multi-component complex ores and their commercial components. Methods. For the study, I used a comparative analysis, synthesis, and the method of extrapolation. Results. The article shows that the change in the type of MET rate for multi-component complex ores and commercial components has led to a significant increase in the effective tax rate. This led to an increase in the corresponding MET revenues in the Krasnoyarsk Krai. The article also substantiates that the introduction of specific rates in other Russian regions requires a significant differentiation of specific MET rates. However, this is risk-bearing concerning unfair distribution of the tax burden and the complexity of tax administration. Conclusions. The issue of identifying multi-component complex ores and their commercial components is controversial. Extending specific MET rates to other regions may complicate the mechanism of rent extraction.

A Study of Perceived Ethicality of Low Corporate Effective Tax Rates

2017 ◽  
Vol 32 (1) ◽  
pp. 87-104 ◽  
Author(s):  
F. Todd DeZoort ◽  
Troy J. Pollard ◽  
Edward J. Schnee
Keyword(s):  
Mediation Analysis ◽  
General Public ◽  
Tax Avoidance ◽  
Tax Rates ◽  
Perceived Fairness ◽  
Effective Tax Rate ◽  
Effective Tax Rates ◽  
Tax Rate ◽  
Policy Practice ◽  
Participant Group

SYNOPSIS U.S. corporations have the ability to avoid paying domestic taxes to achieve an effective tax rate that is much lower than the statutory federal tax rate. This study evaluates the extent that individuals differ in their attitudes about the ethicality of corporations avoiding domestic taxes to achieve low effective tax rates. We also examine the extent to which the specific tax avoidance method used by corporations to access a low effective tax rate affects perceived ethicality. Eighty-two members of the general public and 112 accountants participated in an experiment with two participant groups and three tax avoidance methods manipulated randomly between subjects. The results indicate a significant interaction between participant group and tax avoidance method, with the general public considering shifting profits out of the country to achieve a low effective tax rate to be highly unethical, while the accountants find tax avoidance from carrying forward prior operating losses to be highly ethical. Further, mediation analysis indicates that perceived fairness and legality mediate the effects of participant type on perceived ethicality. Mediation analysis also reveals that sense of fairness and legality mediate the link between tax avoidance method and perceived ethicality. We conclude by considering the study's policy, practice, and research implications.

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