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Joint Production of Goods and Knowledge: Implications for Tax Reform

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Author Info
Carlo Perroni

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Abstract

This paper examines the welfare impacts of tax reformin the context of a perfect-foresight two-sector model with linearendogenous growth, where new knowledge is a byproduct of productionactivities. A calibrated version of this model is used to obtainnumerical estimates of the welfare impact of equal-yield unanticipatedtax changes through transitional analysis. Simulation resultsindicate that the size of the welfare effects of income tax reformdepends crucially on the sectoral composition of final consumptionand investment demand, and on the interplay between output complementaritylinkages and factor intensities. Copyright Kluwer Academic Publishers 1997

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File URL: http://hdl.handle.net/10.1023/A:1008638320437
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Publisher Info
Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 4 (1997)
Issue (Month): 2 (May)
Pages: 149-165
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Handle: RePEc:kap:itaxpf:v:4:y:1997:i:2:p:149-165

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Web page: http://www.springerlink.com/link.asp?id=102915

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Related research
Keywords: Optimal Taxation; Growth;

References listed on IDEAS
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  1. Auerbach, Alan J & Kotlikoff, Laurence J & Skinner, Jonathan, 1983. "The Efficiency Gains from Dynamic Tax Reform," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(1), pages 81-100, February. [Downloadable!] (restricted)
    Other versions:
  2. repec:fth:prinin:151 is not listed on IDEAS
  3. Pecorino, Paul, 1994. "The Growth Rate Effects of Tax Reform," Oxford Economic Papers, Oxford University Press, vol. 46(3), pages 492-501, July. [Downloadable!] (restricted)
  4. Nerlove, Marc & Razin, Assaf & Sadka, Efraim & von Weizsacker, Robert K., 1993. "Comprehensive income taxation, investments in human and physical capital, and productivity," Journal of Public Economics, Elsevier, vol. 50(3), pages 397-406, March. [Downloadable!] (restricted)
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  5. Pecorino, Paul, 1993. "Tax structure and growth in a model with human capital," Journal of Public Economics, Elsevier, vol. 52(2), pages 251-271, September. [Downloadable!] (restricted)
  6. Barro, Robert J. & Sala-i-Martin, Xavier, 1992. "Public Finance in Models of Economic Growth," CEPR Discussion Papers 630, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  7. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Perroni, Carlo, 1995. "Assessing the Dynamic Efficiency Gains of Tax Reform When Human Capital Is Endogenous," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(4), pages 907-25, November. [Downloadable!] (restricted)
  9. Summers, Lawrence H, 1981. "Capital Taxation and Accumulation in a Life Cycle Growth Model," American Economic Review, American Economic Association, vol. 71(4), pages 533-44, September. [Downloadable!] (restricted)
  10. Harvey S. Rosen, 1982. "Taxation and On-the-job Training Decisions," NBER Working Papers 0733, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Stokey, Nancy L & Rebelo, Sergio, 1995. "Growth Effects of Flat-Rate Taxes," Journal of Political Economy, University of Chicago Press, vol. 103(3), pages 519-50, June. [Downloadable!] (restricted)
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  12. Young, Alwyn, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 369-405, May. [Downloadable!] (restricted)
  13. Jones, Larry E & Manuelli, Rodolfo E & Rossi, Peter E, 1993. "Optimal Taxation in Models of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 485-517, June. [Downloadable!] (restricted)
  14. Robert G. King & Sergio Rebelo, 1990. "Public Policy and Economic Growth: Developing Neoclassical Implications," NBER Working Papers 3338, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  15. Harvey Rosen, 1982. "Taxation and On-The-Job Training Decisions," Working Papers 531, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  16. Michael J. Boskin, 1975. "Notes on the Tax Treatment of Human Capital," NBER Working Papers 0116, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Romer, Paul M, 1987. "Growth Based on Increasing Returns Due to Specialization," American Economic Review, American Economic Association, vol. 77(2), pages 56-62, May. [Downloadable!] (restricted)
  18. Michael B. Devereux & David R. F. Love, 1994. "The Effects of Factor Taxation in a Two-Sector Model of Endogenous Growth," Canadian Journal of Economics, Canadian Economics Association, vol. 27(3), pages 509-36, August. [Downloadable!] (restricted)
  19. Holtmann, A G, 1971. "Joint Products and On-the-Job Training," Journal of Political Economy, University of Chicago Press, vol. 79(4), pages 929-31, July-Aug.. [Downloadable!] (restricted)
  20. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October. [Downloadable!] (restricted)
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  21. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Philip Trostel & Ian Walker, 2006. "Education and Work," Education Economics, Taylor and Francis Journals, vol. 14(4), pages 377-399, December. [Downloadable!] (restricted)
    Other versions:
  2. Theo Eicher & Stephen Turnovsky & Maria Carme Riera i Prunera, 2003. "Effects of differential taxation on factor accumulation and growth," Working Papers in Economics 98, Universitat de Barcelona. Espai de Recerca en Economia. [Downloadable!]
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