Supply-Side Economics in an Integrated World Economy [electronic resource] Tesa, Linda L..

Tesa, Linda L.
Washington, D.C. : International Monetary Fund, 1993.
IMF eLibrary
IMF Working Papers; Working Paper No. 93/81.
IMF Working Papers; Working Paper No. 93/81
Government document
1 online resource (62 p.)
Local subjects:
Account deficits.
Budget constraint.
Budget constraints.
Budget deficit.
Budget deficits.
Capital accumulation.
Capital income taxation.
Capital stock.
Capital tax.
Capital taxation.
Capital taxes.
Compensation of employees.
Consumption tax.
Consumption taxes.
Distortionary taxation.
Domestic tax.
Effective tax rates.
Efficient tax system.
Fiscal adjustment.
Fiscal adjustment package.
Fiscal austerity.
Fiscal consolidation.
Fiscal deficit.
Fiscal expansion.
Fiscal policies.
Fiscal policy.
Fiscal policy adjustments.
Fiscal policy framework.
Fiscal policy instrument.
Foreign capital.
Foreign interest payments.
Foreign tax.
Government budget.
Government budget constraints.
Government expenditure.
Government expenditures.
Home country.
Income tax rates.
Income taxes.
Increase in consumption.
Increase in expenditures.
Indirect tax.
Indirect taxation.
Indirect taxes.
Interest payments.
International taxation.
Labor taxes.
Low-tax countries.
Lump-sum taxation.
Lump-sum taxes.
Optimal taxation.
Percent tax rate.
Public debt.
Public expenditures.
Reduction in government expenditures.
State tax.
Structural fiscal.
Substitution effect.
Tax agreements.
Tax base.
Tax breaks.
Tax collection.
Tax countries.
Tax distortions.
Tax efficiency.
Tax harmonization.
Tax incidence.
Tax increase.
Tax increases.
Tax on capital.
Tax policy.
Tax rates.
Tax reductions.
Tax reform.
Tax reforms.
Tax return.
Tax revenue.
Tax revenues.
Tax system.
Tax systems.
Taxes on capital.
Taxes on labor.
Total tax revenue.
Unit of tax revenue.
United States.
The macroeconomic effects of changes in tax and expenditure policies are examined in the context of the competitive equilibrium of a two-country, two-sector model of an integrated world economy. Governments finance purchases and net transfers of tradable and nontradable goods by imposing distortionary taxes on factor incomes and consumption. The model is parameterized and calibrated using data from large industrial economies, including estimates of effective tax rates. Numerical simulations provide estimates of the welfare costs associated with existing distortionary taxes and of the potential gains linked to a more efficient use of these taxes. Welfare gains from tax reforms favoring indirect taxation are substantial. The effects of permanent changes in expenditures depend on their sectoral allocation across tradables and nontradables and on whether they are debtor tax-financed. Trade in goods and assets is very sensitive to fiscal policy changes, but aggregate consumption patterns and welfare implications are not.
Description based on print version record.
Mendoza, Enrique G.
Tesa, Linda L.
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