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Taxation, bubbles and endogenous growth

Author

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  • Bosi, Stefano
  • Pham, Ngoc-Sang

Abstract

We study the interplay between taxation, bubble formation and economic growth. A rational bubble may be beneficial when growth is fueled by public investment (or R&D externalities) and the government levies taxes on bubble returns to finance this investment. Our main result challenges the conventional view about the negative effect of bubbles in endogenous growth (Grossman and Yanagawa, 1993).

Suggested Citation

  • Bosi, Stefano & Pham, Ngoc-Sang, 2016. "Taxation, bubbles and endogenous growth," Economics Letters, Elsevier, vol. 143(C), pages 73-76.
    • Handle: RePEc:eee:ecolet:v:143:y:2016:i:c:p:73-76
    DOI: 10.1016/j.econlet.2016.03.018
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    Cited by:

    1. Pham, Hai Ha & Pham, Ngoc-Sang, 2024. "Effects of wariness on economic growth in overlapping generations models," Journal of Mathematical Economics, Elsevier, vol. 115(C).
    2. Hirano, Tomohiro & Toda, Alexis Akira, 2024. "Bubble economics," Journal of Mathematical Economics, Elsevier, vol. 111(C).
    3. Bosi, Stefano & Ha-Huy, Thai & Le Van, Cuong & Pham, Cao-Tung & Pham, Ngoc-Sang, 2018. "Financial bubbles and capital accumulation in altruistic economies," Journal of Mathematical Economics, Elsevier, vol. 75(C), pages 125-139.
    4. Bahloul Zekkari, Kathia, 2024. "Asset bubble and growth: Elastic labor supply with fiscal policy," Journal of Mathematical Economics, Elsevier, vol. 110(C).
    5. Pham, Ngoc Sang & Le Van, Cuong & Bosi, Stefano, 2025. "To Bubble or Not to Bubble: Asset Price Dynamics and Optimality in OLG Economies," MPRA Paper 125772, University Library of Munich, Germany.
    6. Hai Ha Pham & Ngoc-Sang Pham, 2025. "Wariness and Poverty Traps," Papers 2510.14418, arXiv.org.
    7. Shulu Che & Ronald Ravinesh Kumar & Peter J. Stauvermann, 2021. "Taxation of Land and Economic Growth," Economies, MDPI, vol. 9(2), pages 1-20, April.

    More about this item

    Keywords

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    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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