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Dynamic Incidence in a Two-Sector Growing Economy

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  • M Homma

    (Department of Economics, Osaka University, Toyonaka, Osaka, Japan)

Abstract

The aim in this paper is to provide a systematic approach to the long-run incidence analysis in a two-sector growth model. For this end, a long-run incidence model as close as possible to the standard short-run incidence model shall be built, and a method of conducting the comparative dynamic analysis which evaluates the long-run factor income distribution will be developed. In so doing, the following three steps shall be taken. First, the logical structure of the long-run incidence model is carefully explored to clarify the relationship between the long-run incidence and the short-run incidence. Second, previous work is extended to cover the long-run incidence effects of other taxes such as commodity or wage taxes. Third, concrete propositions on the long-run incidence are established comparable to those on the short-run incidence.

Suggested Citation

  • M Homma, 1985. "Dynamic Incidence in a Two-Sector Growing Economy," Environment and Planning C, , vol. 3(3), pages 285-297, September.
    • Handle: RePEc:sae:envirc:v:3:y:1985:i:3:p:285-297
    DOI: 10.1068/c030285
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    References listed on IDEAS

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    1. Martin Feldstein, 1974. "Incidence of a Capital Income Tax in a Growing Economy with Variable Savings Rates," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 41(4), pages 505-513.
    2. Ballentine, J Gregory, 1978. "The Incidence of a Corporation Income Tax in a Growing Economy," Journal of Political Economy, University of Chicago Press, vol. 86(5), pages 863-875, October.
    3. Grieson, Ronald E., 1975. "The incidence of profits taxes in a neo-classical growth model," Journal of Public Economics, Elsevier, vol. 4(1), pages 75-85, February.
    4. Martin S. Feldstein, 1974. "Tax Incidence in a Growing Economy with Variable Factor Supply," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(4), pages 551-573.
    5. Homma, Masaaki, 1981. "A dynamic analysis of the differential incidence of capital and labour taxes in a two-class economy," Journal of Public Economics, Elsevier, vol. 15(3), pages 363-378, June.
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