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Growth Effects of Flat-Rate Taxes

  • Stokey, Nancy L
  • Rebelo, Sergio

Recent estimates of the potential growth effects of tax reform vary wildly, ranging from zero to eight percentage points. Using an endogenous growth model, the authors assess which model features and parameter values are important for determining the quantitative impact of tax reform. The quantitative estimates in several recent papers are compared with each other and with some of the evidence from U.S. experience. The authors find that Robert Lucas's conclusion, that tax reform would have little or no impact on the U.S. growth rate, is theoretically robust and consistent with the evidence. Copyright 1995 by University of Chicago Press.

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File URL: http://dx.doi.org/10.1086/261993
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Article provided by University of Chicago Press in its journal Journal of Political Economy.

Volume (Year): 103 (1995)
Issue (Month): 3 (June)
Pages: 519-50

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Handle: RePEc:ucp:jpolec:v:103:y:1995:i:3:p:519-50
Contact details of provider: Web page: http://www.journals.uchicago.edu/JPE/

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  13. Jones, Larry E & Manuelli, Rodolfo E, 1990. "A Convex Model of Equilibrium Growth: Theory and Policy Implications," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 1008-38, October.
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  19. repec:ilo:ilowps:168467 is not listed on IDEAS
  20. N/A, 1976. "Chapter II. The World Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 77(1), pages 33-49, August.
  21. Christiano, Lawrence J., 1988. "Why does inventory investment fluctuate so much?," Journal of Monetary Economics, Elsevier, vol. 21(2-3), pages 247-280.
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