Taxes,the Speed of Convergence,and Implications for Welfare Effects of Fiscal Policy |
| |
Authors: | Benjamin Russo |
| |
Abstract: | Previous studies suggest that income taxes do not affect the convergence speed in neoclassical and new growth models. Those studies use very simple tax structures. This paper shows that a relation between taxes and convergence speed emerges if tax benefits are included in standard macroeconomic models. A welfare example suggests that the economic impact could be large even if the absolute size of the effect of taxes on convergence speed is small. |
| |
Keywords: | |
|
|