Capital Taxes, Trade Costs, and the Irish Miracle
AbstractThis paper uses detailed international trade data to examine whether the rapid growth of Ireland in the 1990s and its accompanying substantial increase in trade in goods and services might have been spurred by an interaction of low taxation of capital and declining international trade costs. Both tariffs and other trade costs for an important class of goods and services have declined to very low levels in the 1990s, while the expansion of foreign direct investment worldwide in that period suggests a great drop in technological and policy barriers to managing international production. The decline in trade costs has profound effects on small economies that also levy low levels of capital taxation. Such economies exhibit a great increase in the production and export of products that have high capital intensity. This implication receives strong support in detailed trade data. The expansion of such modern, high labor-productivity sectors has been identified as an important recent feature of Irish growth. (JEL: F12, F14, F21, F43, H25) (c) 2007 by the European Economic Association.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 5 (2007)
Issue (Month): 2-3 (04-05)
Contact details of provider:
Web page: http://www.mitpressjournals.org/jeea
Find related papers by JEL classification:
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Eoin O'Malley, 2012. "A Survey of Explanations for the Celtic Tiger Boom," The Institute for International Integration Studies Discussion Paper Series iiisdp417, IIIS.
- Zhi Wang & Shang-Jin Wei & Anna Wong, 2010.
"Does a Leapfrogging Growth Strategy Raise Growth Rate? Some International Evidence,"
NBER Working Papers
16390, National Bureau of Economic Research, Inc.
- Wang, Zhi & Wei, Shang-Jin & Wong, Anna, 2010. "Does a Leapfrogging Growth Strategy Raise Growth Rate? Some International Evidence," Working Papers on Regional Economic Integration 47, Asian Development Bank.
- Tehmina S. Khan & John Norregaard, 2007. "Tax Policy: Recent Trends and Coming Challenges," IMF Working Papers 07/274, International Monetary Fund.
- Claro, Sebastian, 2008.
"FDI Liberalization as a Source of Comparative Advantage in China,"
Working Paper Series
RP2008/91, World Institute for Development Economic Research (UNU-WIDER).
- Sebastian Claro, 2009. "FDI Liberalization as a Source of Comparative Advantage in China," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 740-753, November.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karie Kirkpatrick).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.