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on Financial Development and Growth |
| By: | Erwan MOUSSAULT (Université de Cergy-Pontoise, THEMA) |
| Abstract: | This paper studies the impact of the tax system on intergenerational family transfers in an overlapping generation model of a closed economy, with endogenous human capital growth. We limit ourselves to simple tax structures with labor and inheritance taxes. When public debt is an available instrument for the government, we show that the fiscal policy used to achieve the long run optimal endogenous growth improves the individuals' consumption of the first generations. In this case, the government reduces the tax burden on labor, encourages human capital development and puts in place a redistributive policy. If the public debt is not available, the government does not pursue a redistributive policy, both tax rates implemented are higher and the long run human capital growth is greater as well. In all cases, the optimal inheritance tax rate is higher than the optimal tax rate on labor income. |
| Keywords: | family transfers, debt, altruism, growth, optimal taxation. |
| JEL: | D64 H21 H23 H63 I31 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ema:worpap:2017-04&r=fdg |
| By: | Attinasi, Maria Grazia; Lalik, Magdalena; Vetlov, Igor |
| Abstract: | The fiscal consolidation measures adopted in many euro area countries over 2010–13 reduced excessive domestic fiscal imbalances, but came at the cost of short-term output losses. This simultaneous tightening of fiscal policy raised concerns that such output losses might be exacerbated by negative spillovers from other countries. This paper presents some model-based simulations for the euro area with a view to gauge the cross-country impact of the fiscal measures adopted over 2010–13. The paper finds that the output effects of the fiscal consolidation were heterogeneous across countries, reflecting the different amounts and composition of fiscal measures adopted. We find that the trade channel is able to generate sizeable cross-border fiscal spillovers in the euro area. However, once the analysis takes into account the remaining channels (e.g. monetary policy reaction, exchange rate, and risk premium) total spillovers are estimated to be relatively small. In general, when compared to the growth fallout of domestic fiscal policies, negative fiscal spillovers do not seem to have added much to the economic growth woes of vulnerable countries. JEL Classification: E42, E32, F42, F45 |
| Keywords: | Fiscal consolidation, macroeconomic models, policy spillovers |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20172040&r=fdg |