How much fiscal space do Latin American countries have to increase their tax burdens in the long term? This paper provides an answer through Laffer curves estimates for taxes on labor, capital, and consumption for the six largest emerging economies of the region: Argentina, Brazil, Chile,...

Former CBO director Doug Elmendorf recently argued that Congress should account for macroeconomic feedback when scoring major tax and spending policies. In this brief, Donald Marron agrees, arguing that CBO and JCT can implement such dynamic scoring in an objective, nonpartisan manner. Dynamic...

We develop a Fiscal Frontier which traces out the maximum government debt level that can be sustained at a given welfare cost. Through duality, the intertemporal policy mix underpinning the Frontier mirrors standard Ramsey policy and defines an upper limit on the welfare gains that can be...

This study uses simulations of state-dependent distributions of fiscal limits for 18 economies in Central America and the Caribbean to better understand governments' ability to service their debt, arising from endogenously determined dynamic Laffer curves. Using a small, open economy model to...

This paper investigates how tax revenue elasticities develop with respect to their tax base and analyses the specific impact of the business cycle. The main novelty of the paper is to use revenue data net of discretionary tax measures. Based on an EU country panel for the period 2001-13, we...

Nach der Bundestagswahl schlägt die Stunde der finanzpolitischen Wahrheit. Wer auch immer die nächste Bundesregierung stellt: Der Kassensturz nach der Wahl wird zeigen, dass kaum noch finanzpolitischer Handlungsspielraum besteht. Die öffentlichen Haushalte haben sich im Zuge der Rezession...

Nach der Bundestagswahl schlägt die Stunde der finanzpolitischen Wahrheit. Wer auch immer die nächste Bundesregierung stellt: Der Kassensturz nach der Wahl wird zeigen, dass kaum noch finanzpolitischer Handlungsspielraum besteht. Die öffentlichen Haushalte haben sich im Zuge der Rezession...

We show that the correct experiment to evaluate the effects of a fiscal adjustment is the simulation of a multi year fiscal plan rather than of individual fiscal shocks. Simulation of fiscal plans adopted by 16 OECD countries over a 30-year period supports the hypothesis that the effects of...

This paper introduces a concern for model misspecification in a Lucas-Stokey optimal fiscal policy setting. The representative household in this economy is endowed with the knowledge of a reference model for the government spending process but acknowledges that this model is potentially...