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Taxation, growth, and resource extraction: A general equilibrium approach


  • Sinn, Hans-Werner


This paper deals with taxation in a framework which is a synthesis between the neoclassical growth model, augmented by a (separable) sector of resource-extracting firms, and the Fisherian intertemporal general equilibrium model: market forces bring about the neoclassical optimal growth path under laissez faire, but taxation may result in welfare-reducing distortions. The taxes studied comprise ad valorem, capital-income, and capital-gains taxes, where the tax revenue is assumed to be redistributed in a lump-sum fashion. Particular attention is paid to the second-best problem of whether capital-income taxation should be supplemented by capitalgains taxation.
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  • Sinn, Hans-Werner, 1982. "Taxation, growth, and resource extraction: A general equilibrium approach," European Economic Review, Elsevier, vol. 19(2), pages 357-386.
  • Handle: RePEc:eee:eecrev:v:19:y:1982:i:2:p:357-386

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    References listed on IDEAS

    1. Laitinen, Kenneth & Theil, Henri, 1978. "Supply and demand of the multiproduct firm," European Economic Review, Elsevier, vol. 11(2), pages 107-154, August.
    2. Clements, Kenneth W., 1980. "An aggregative multiproduct supply model," European Economic Review, Elsevier, vol. 13(2), pages 239-245, March.
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    Cited by:

    1. Amundsen, Eirik S. & Schob, Ronnie, 1999. "Environmental taxes on exhaustible resources," European Journal of Political Economy, Elsevier, vol. 15(2), pages 311-329, June.
    2. Ronnie Schöb, 2003. "The Double Dividend Hypothesis of Environmental Taxes: A Survey," CESifo Working Paper Series 946, CESifo Group Munich.
    3. Daubanes, Julien, 2009. "Taxation of Oil Products and GDP Dynamics of Oil-Rich Countries," TSE Working Papers 09-012, Toulouse School of Economics (TSE).

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