Budget-neutral tax wedge reductions rank high in the policy agenda of several EMU member states. Using a New Keynesian DSGE model of a monetary union with a complex labour market structure and a comprehensive public sector, we evaluate the macroeconomic and welfare effects of reducing the firms'...

Previous studies have shown that the optimal marginal tax rate at the bottom of the income distribution may be positive, negative, or even zero. This paper reexamines this problem in a unified framework and tries to evaluate the arguments. It turns out that the case for positive marginal tax...

Microsimulation (MS) and Computable General Equilibrium models (CGE) have both been widely used in policy analysis. Their combination allows the utilisation of the advantages of both types. The aim of this paper is to describe the state-of-the-art in simulation analysis and to illustrate the...

The literature on taxes and public finance generally focuses on revenues, an easily observable and generally available variable, as the observable measure of tax policy. Still, revenues depend on many determinants other than the political will and policy objectives of the government. It is...

This paper uses a yearly dataset of plant-level investment in Colombian firms during the period 1997 to 2007 to assess the impact of a tax incentive for firms that invest in fixed assets implemented in 2004. A positive and statistically significant correlation is found between the boom observed...

In this paper I examine the incentives of regions to unite, to separate and to provide public goods. Separation allows for greater influence over the nature of political decision making while unification allows regions to exploit economies of scale in the provision of public goods. When public...

We describe the simple analytics of the four main types of sales taxes under revenue neutrality: the retail sales tax, the value added tax, a cascading sales tax and a manufacturers' sales tax. The retail sales tax is shown to be equivalent to a value added tax. In order to produce equal...

Many predictions and conclusions in climate change literature have been made on the basis of theoretical analyses and quantitative models that assume exogenous technological change. One may wonder if those policy prescriptions hold in the more realistic case of endogenously evolving...

There is a long-standing debate on the relationship between economic development and environmental quality. From a sustainable development viewpoint there has been a growing concern that the economic expansion of the world economy will cause irreparable damage to our planet. In the last few...

Although developing countries face a drastic increase in their greenhouse gas emissions, mitigation actions against climate change do not rank high among their priorities. The obvious reason lies in the necessity for them to continue the development process, which is characterised by pressing...