Joint Production of Goods and Knowledge: Implications for Tax Reform
AbstractThis 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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Bibliographic InfoArticle provided by Springer in its journal International Tax and Public Finance.
Volume (Year): 4 (1997)
Issue (Month): 2 (May)
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Web page: http://www.springerlink.com/link.asp?id=102915
Optimal Taxation; Growth;
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