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Tax Policy for Economic Recovery and Growth

Author

Listed:
  • Jens Matthias Arnold
  • Bert Brys
  • Christopher Heady
  • Åsa Johansson
  • Cyrille Schwellnus
  • Laura Vartia

Abstract

This article identifies tax policy that both speeds recovery from the current economic crisis and contributes to long-run growth. This is a challenge because short‐term recovery requires increases in demand while long‐term growth requires increases in supply. As short‐term tax concessions can be hard to reverse, this implies that policies to alleviate the crisis could compromise long‐run growth. The analysis makes use of recent evidence on the impact of tax structure on economic growth to identify which growth‐enhancing tax changes can also aid recovery, taking account of the need to protect those on low incomes.

Suggested Citation

  • Jens Matthias Arnold & Bert Brys & Christopher Heady & Åsa Johansson & Cyrille Schwellnus & Laura Vartia, 2011. "Tax Policy for Economic Recovery and Growth," Economic Journal, Royal Economic Society, vol. 121(550), pages 59-80, February.
    • Handle: RePEc:ecj:econjl:v:121:y:2011:i:550:p:f59-f80
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    File URL: http://hdl.handle.net/10.1111/j.1468-0297.2010.02415.x
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    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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    1. Tax Policy for Economic Recovery and Growth (EJ 2011) in ReplicationWiki

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