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Joint Production of Goods and Knowledge: Implications for Tax Reform

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  • Carlo Perroni

Abstract

This paper examines the welfare impacts of tax reformin the context of a perfect-foresight two-sector model with linearendogenous growth, where new knowledge is a byproduct of productionactivities. A calibrated version of this model is used to obtainnumerical estimates of the welfare impact of equal-yield unanticipatedtax changes through transitional analysis. Simulation resultsindicate that the size of the welfare effects of income tax reformdepends crucially on the sectoral composition of final consumptionand investment demand, and on the interplay between output complementaritylinkages and factor intensities. Copyright Kluwer Academic Publishers 1997

Suggested Citation

  • Carlo Perroni, 1997. "Joint Production of Goods and Knowledge: Implications for Tax Reform," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 4(2), pages 149-165, May.
  • Handle: RePEc:kap:itaxpf:v:4:y:1997:i:2:p:149-165
    DOI: 10.1023/A:1008638320437
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    References listed on IDEAS

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    Cited by:

    1. Theo Eicher & Stephen Turnovsky & Maria Carme Riera i Prunera, 2003. "Effects of differential taxation on factor accumulation and growth," Working Papers in Economics 98, Universitat de Barcelona. Espai de Recerca en Economia.
    2. Philip Trostel & Ian Walker, 2006. "Education and Work," Education Economics, Taylor & Francis Journals, vol. 14(4), pages 377-399.

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    Keywords

    Optimal Taxation; Growth;

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