This paper explores the qualitative and quantitative implications of taxation for growth and savings in three Latin … American countries: Brazil, Chile and Mexico, studying a small open economy in the context of an endogenous growth model where … capital at a considerably lower rate than at present. Consumption should be heavily taxed in Brazil and Mexico and optimal …

the model used in this paper, savings and investment are co-determined through adjustments in the real interest rate, and … quantitatively large. For plausible parameter values, the differences in growth rates, savings rates and investment rates are of the … of overlapping generations, in the context of a class of endogenous growth theories with investment adjustment costs. In …