Taxing capital in a large, open economy

Sibert, Anne (1990) Taxing capital in a large, open economy. Journal of Public Economics 41 (3), pp. 297-317. ISSN 0047-2727.

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Official URL: https://doi.org/10.1016/0047-2727(90)90063-N

Abstract

This paper analyzes capital taxation in a dynamic, optimizing, equilibrium model of a large, open economy. It is shown that the existence of current account imbalances may yield surprising results. For example, if a country has a current account deficit, the tendency of an increased tax on investment to lower wages is dampened. If the deficit is sufficiently large, an increased investment tax may actually increase both wages and welfare in the long run. A country with a current account surplus may find that temporary investment incentives improve its current account in all but the short run.

Metadata

Item Type:	Article
School:	Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
Depositing User:	Sarah Hall
Date Deposited:	04 Aug 2020 06:55
Last Modified:	02 Aug 2023 18:01
URI:	https://eprints.bbk.ac.uk/id/eprint/32774

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