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Fiscal reform, long-run growth and welfare in a monetary model: The case of Mexico

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  • Arturo Antón Sarabia

    (Centro de Investigación y Docencia Económicas)

Abstract

A neoclassical endogenous growth model is presented where a representative household deriving utility from both consumption and leisure must use money in order to purchase consumption goods. Taxes on money holdings, capital and labor income may be used to finance an exogenous stream of wasteful government expenditures. The model is especially calibrated for the Mexican economy and used to analyze the effect of alternative tax reforms and higher government expenditure levels on both growth and welfare.

Suggested Citation

  • Arturo Antón Sarabia, 2005. "Fiscal reform, long-run growth and welfare in a monetary model: The case of Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 20(2), pages 143-172.
    • Handle: RePEc:emx:esteco:v:20:y:2005:i:2:p:143-172
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    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/165/167
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    References listed on IDEAS

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    1. Chamley, Christophe, 1986. "Optimal Taxation of Capital Income in General Equilibrium with Infinite Lives," Econometrica, Econometric Society, vol. 54(3), pages 607-622, May.
    2. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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