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In this paper we investigate the effects of tax competition in a simple endogenous growth model with elastic labor supply. Our analysis focuses on two issues. First, we show that all taxes, i.e. on capital, labor, and consumption, are harmful for growth. Second, we derive the optimal tax policy....
Persistent link: https://www.econbiz.de/10013316505
This paper analyzes the impact of fiscal competition through infrastructure in a New Economic Geography framework. It is shown that regional competition leads to convergence if the trade costs are high but induces divergence if trade cost have fallen below a certain value. Moreover, fiscal...
Persistent link: https://www.econbiz.de/10012776022
We utilise repeated cross sections of micro data from several countries, available from the Luxembourg Income Study, LIS, to estimate labour supply elasticities, both at the intensive and extensive margin. The benefit of the data is that it spans over four decades and includes a large number of...
Persistent link: https://www.econbiz.de/10013045921
Dutch cities which combine a favorable location in terms of distance to work with a variety of urban amenities appear to be the most attractive locations for people to live. Relatively safe cities, offering a variety of history and culture events, as well as good restaurants have significantly...
Persistent link: https://www.econbiz.de/10013123210
Economic activity tends to cluster. This results in productivity gains. For policy makers this offers an opportunity to formulate and promote policies that foster clustering of economic activity. Paradoxically, although agglomeration rents are often found in empirical research a rationale for...
Persistent link: https://www.econbiz.de/10013098963
Using the German local business tax as a testing ground, we empirically investigate the impact of firm agglomeration on municipal tax setting behavior. The analysis exploits a rich data source on the population of German firms to construct detailed measures for the communities' agglomeration...
Persistent link: https://www.econbiz.de/10013146982
elasticity measures are not sufficient statistics and must be adjusted upwards in optimal tax formulas. Finally, we study a …
Persistent link: https://www.econbiz.de/10013015356
inverse-elasticity rule. We also verify the necessary and sufficient condition for the optimal solution to exhibit uniform …
Persistent link: https://www.econbiz.de/10012915564
confirm recent evidence providing a solution to the “distance-elasticity puzzle,” but show that these estimates of the …
Persistent link: https://www.econbiz.de/10013315671
education should be effectively subsidized if, and only if, the elasticity of the earnings function is increasing in education …. The strength of second-best subsidization increases in the elasticity of the elasticity of the earnings function. This … second-order elasticity rule extends the well-known Ramsey-Boiteux Inverse Elasticity Rule …
Persistent link: https://www.econbiz.de/10013316238