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on Public Finance |
| By: | Mark Gersovitz |
| Abstract: | Tax laws and administrations often treat different size firms differently. There is, however, little research on the consequences. As modeled here, oligopolists with different efficiencies determine the size distribution of firms. A government that maximizes a weighted sum of consumer surplus, profits, and tax receipts can tax firms with different efficiencies differently and provides a reference point for other, more restricted differential tax systems. Taxes include a specific sales tax, an ad valorem sales tax, and a profits tax with imperfect deductibility of capital cost, and a combination of the last two. In general there is a pattern of tax rates by efficiency of firm. It is heavily dependent on the social valuation of tax receipts. Analytic and simulation results are provided. When both ad valorem taxes and the imperfect profits tax are combined, simulations suggest that the former rate is higher and the latter rate is lower for relatively inefficient firms. |
| Keywords: | Optimal tax , size distribution , imperfect competition , Taxation , Profits , Tax rates , Economic models , |
| Date: | 2006–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/271&r=pub |
| By: | Xavier Debrun; Theo Thomas; Taline Koranchelian; Isabell Adenauer; Peter S. Heller; Menachem Katz |
| Abstract: | Debt relief and the scaling up of aid to low-income countries should allow for greater fiscal space for expenditure programs to create long-term growth and lower poverty rates. But designing a suitable medium-term fiscal framework that fosters a sustainable delivery of better public services and infrastructure while maintaining a credible commitment to fiscal prudence confronts many challenges. This paper discusses what low-income countries can do to shape fiscal policy frameworks that are ambitious in trying to absorb additional aid while still ensuring longer-term sustainability for government expenditure programs and finances. It suggests what approaches can be used to manage the greater fiscal policy risks associated with a scaled-up aid environment, including coordination with monetary policy. The paper also discusses what institutional changes are needed if donors and countries are to facilitate the implementation of a higher level of aid-financed spending programs. |
| Keywords: | Aid , fiscal policy , low-income countries , macroeconomic policy , public financial management , Economic assistance , Fiscal policy , Low income developing countries , Economic policy , Public finance , |
| Date: | 2006–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/270&r=pub |
| By: | Philippe D Karam; Doug Hostland |
| Abstract: | This paper documents the specification of a model that was constructed to assess debt sustainability in emerging market economies. Key features of the model include external and fiscal sectors, which allow assessment of external and public debt in a unified framework; public and external debt, which both have an explicit maturity structure along with a distinction between denomination in domestic versus foreign currency to facilitate debt management analysis; monetary and fiscal policy, which are endogenous and specified using explicit forward-looking policy rules; an endogenous risk premium on public and external debt; and a mechanism for invoking a sudden stop in private capital flows. The paper provides an overview of the basic structure of the model, outlines the methodology used to calibrate the parameters, and illustrates the key properties of the model with reference to dynamic responses of selected variables to shocks of interest. |
| Keywords: | Debt sustainability , dynamic analysis , Monte Carlo simulations , Debt sustainability analysis , Emerging markets , Economic models , |
| Date: | 2006–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:06/268&r=pub |