An applied general equilibrium analysis of fiscal reforms to fight poverty in Mexico
The main goal of this paper is to analyze the consequences of two alternative ways of raising funds to finance poverty alleviation programs in Mexico: A Value Added Tax (VAT) reform and a personal income tax reform (IT). The impact of the reforms is analyzed with an applied general equilibrium model of the Mexican economy, calibrated using a 1996 Social Accounting Matrix. The model includes 18 production sectors, 10 representative households, the government, and the rest of the world. The cash transfers required to attain a fixed increase in the Equivalent Variation (EV) of the lowest income households are obtained either increasing effective VAT rates or IT rates. When all rates are scaled up by the same factor, the VAT reform generates a positive global EV considerably larger than the one obtained scaling the IT rates, though the latter diminishes (increases) lower (higher) income households’ contribution. Setting a uniform VAT rate results in a positive global EV considerably larger than the one obtained with a uniform IT. Moreover, the distribution gap increases in the latter case since the richest households receive the largest benefits.
Volume (Year): XXVII (2008)
Issue (Month): 1 (May)
|Contact details of provider:|| Postal: Avenida Lazaro Cardenas 4600 Ote., Fraccionamiento Residencial Las Torres, C.P. 64930. Monterrey, Nuevo Leon. México.|
Phone: +52 (81) 8329 4150
Fax: +52 (81) 8342 2897
Web page: http://www.economia.uanl.mx
More information through EDIRC
|Order Information:|| Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Coady, David P. & Harris, Rebecca Lee, 2001. "Evaluating transfer programs within a general equilibrium framework," FCND briefs 110, International Food Policy Research Institute (IFPRI).
- Kehoe, Timothy J & Serra-Puche, Jaime, 1991.
"A General Equilibrium Appraisal of Energy Policy in Mexico,"
Springer, vol. 16(1), pages 71-93.
- T. J. Kehoe & J. Serra-Puche, 1983. "A General Equilibrium Appraisal of Energy Policy in Mexico," Working papers 321, Massachusetts Institute of Technology (MIT), Department of Economics.
- Paul S. Armington, 1969. "A Theory of Demand for Products Distinguished by Place of Production (Une thÃ©orie de la demande de produits diffÃ©renciÃ©s d'aprÃ¨s leur origine) (Una teorÃa de la demanda de productos distinguiÃ©nd," IMF Staff Papers, Palgrave Macmillan, vol. 16(1), pages 159-178, March.
- Coady, David P. & Harris, Rebecca Lee, 2001. "Evaluating transfer programs within a general equilibrium framework," FCND discussion papers 110, International Food Policy Research Institute (IFPRI).
- Decaluwe, Bernard & Martens, Andre, 1988. "CGE modeling and developing economies: A concise empirical survey of 73 applications to 26 countries," Journal of Policy Modeling, Elsevier, vol. 10(4), pages 529-568.
- Decaluwe, B. & Martens, A., 1988. "Cge Modeling And Developing Economies: A Concise Empirical Survey Of 73 Applications To 26 Countries," Papers 8816, Laval - Recherche en Politique Economique.
- Kehoe, Timothy J. & Serra-Puche, Jaime, 1983. "A computational general equilibrium model with endogenous unemployment : An analysis of the 1980 fiscal reform in Mexico," Journal of Public Economics, Elsevier, vol. 22(1), pages 1-26, October.
- Kehoe, Timothy J. & Serra-Puche, Jaime & Solis, Leopoldo, 1984. "A general equilibrium model of domestic commerce in Mexico," Journal of Policy Modeling, Elsevier, vol. 6(1), pages 1-28, February.
- Shoven, John B. & Whalley, John, 1972. "A general equilibrium calculation of the effects of differential taxation of income from capital in the U.S," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 281-321, November.
- John B. Shoven & John Whalley, 1972. "A General Equilibrium Calculation of the Effects of Differential Taxation of Income from Capital in the U.S," Cowles Foundation Discussion Papers 328, Cowles Foundation for Research in Economics, Yale University.
- Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-1051, September.
- Levy, Santiago, 1987. "A short-run general equilibrium model for a small, open economy," Journal of Development Economics, Elsevier, vol. 25(1), pages 63-88, February. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:ere:journl:v:xxvii:y:2008:i:1:p:81-115. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dora María Vega Facio)
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.