全球智库信息集成服务系统(G2TT): Saving Europe?: The Unpleasant Arithmetic of Fiscal Austerity in Integrated Economies

G2TT

来源类型	Working Paper
规范类型	报告
DOI	10.3386/w20200
来源ID	Working Paper 20200
	Saving Europe?: The Unpleasant Arithmetic of Fiscal Austerity in Integrated Economies
	Enrique G. Mendoza; Linda L. Tesar; Jing Zhang
发表日期	2014-06-05
出版年	2014
语种	英语
摘要	What are the macroeconomic effects of tax adjustments in response to large public debt shocks in highly integrated economies? The answer from standard closed-economy models is deceptive, because they underestimate the elasticity of capital tax revenues and ignore cross-country spillovers of tax changes. Instead, we examine this issue using a two-country model that matches the observed elasticity of the capital tax base by introducing endogenous capacity utilization and a partial depreciation allowance. Tax hikes have adverse effects on macro aggregates and welfare, and trigger strong cross-country externalities. Quantitative analysis calibrated to European data shows that unilateral capital tax increases cannot restore fiscal solvency, because the dynamic Laffer curve peaks below the required revenue increase. Unilateral labor tax hikes can do it, but have negative output and welfare effects at home and raise welfare and output abroad. Large spillovers also imply that unilateral capital tax hikes are much less costly under autarky than under free trade. Allowing for one-shot Nash tax competition, the model predicts a "race to the bottom" in capital taxes and higher labor taxes. The cooperative equilibrium is preferable, but capital (labor) taxes are still lower (higher) than initially. Moreover, autarky can produce higher welfare than both Nash and Cooperative equilibria.
主题	Macroeconomics ; Fiscal Policy ; International Economics ; International Finance ; International Macroeconomics ; Public Economics ; National Fiscal Issues
URL	https://www.nber.org/papers/w20200
来源智库	National Bureau of Economic Research (United States)
引用统计
资源类型	智库出版物
条目标识符	http://119.78.100.153/handle/2XGU8XDN/577873
推荐引用方式 GB/T 7714	Enrique G. Mendoza,Linda L. Tesar,Jing Zhang. Saving Europe?: The Unpleasant Arithmetic of Fiscal Austerity in Integrated Economies. 2014.