Postwar British Economic Growth and the Legacy of Keynes
AbstractFollowing John Maynard Keynes's recommendations, Britain taxed capital income at a much higher rate than the United States during the war and for much of the postwar period. This paper presents a quantitative analysis of the policies designed by Keynes using an endogenous growth model and the neoclassical growth model. The implications of tax-smoothing policies are also evaluated. The authors find that the welfare costs of Keynes's policies were very high relative to a tax-smoothing policy and argue that Britain's poor macroeconomic performance in the early postwar period reflects the high tax rates levied on capital income. Copyright 1997 by the University of Chicago.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Political Economy.
Volume (Year): 105 (1997)
Issue (Month): 3 (June)
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Web page: http://www.journals.uchicago.edu/JPE/
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