Buti, Marco; Martinez-Mongay, Carlos; Sekkat, Khalid; … - 2002
It is often claimed that tax and welfare reforms that aim at enhancing efficiency may come at the cost of cyclical … stabilisation. Reducing the generosity of welfare systems and lowering taxes may boost efficiency and output, and improve market …. This paper argues that the alleged trade-off between efficiency/flexibility and stabilisation may not exist. We show that …