This paper evaluates the macroeconomic effects of taxes on banking in a small open economy in a currency union such as the euro area for three tax alternatives: an additional tax on profits, on deposits, and on loans. We propose a DSGE model with rich detail of taxes and a banking sector and...

The empirical literature of growth has steadly improved the econometric methods used mainly to address the effect of cross-country heterogeneity in the estimated convergence rate. In this paper, we highlight an important implication of this process of econometric refinement that has so far...