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The Ahmad-Stern approach revisited: Variants and an application to Mexico

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  • Urzúa, Carlos M.

    () (Tecnológico de Monterrey, Campus Ciudad de México)

Abstract

This paper extends the methodology first proposed by Ahmad and Stern for the design of tax reforms that are optimal at the margin. The extension centers on a sharper approximation of welfare measures. The original approach and its variant are illustrated in the case of the current Mexican tax system.

Suggested Citation

  • Urzúa, Carlos M., 2004. "The Ahmad-Stern approach revisited: Variants and an application to Mexico," EGAP Working Papers 2004-05, Tecnológico de Monterrey, Campus Ciudad de México.
  • Handle: RePEc:ega:docume:200405
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    File URL: http://alejandria.ccm.itesm.mx/egap/documentos/EGAP-2004-05.pdf
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    References listed on IDEAS

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    1. Urzúa, Carlos M., 2000. "Flexibilidad y racionamiento en el mercado laboral mexicano, 1988-1998," EGAP Working Papers 200308, Tecnológico de Monterrey, Campus Ciudad de México.
    2. James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, pages 527-539.
    3. Ahmad, Ehtisham & Stern, Nicholas, 1984. "The theory of reform and indian indirect taxes," Journal of Public Economics, Elsevier, pages 259-298.
    4. Decoster, Andre & Schokkaert, Erik, 1990. "Tax reform results with different demand systems," Journal of Public Economics, Elsevier, pages 277-296.
    5. Daron Acemoglu & Joshua Angrist, 2001. "How Large are Human-Capital Externalities? Evidence from Compulsory-Schooling Laws," NBER Chapters,in: NBER Macroeconomics Annual 2000, Volume 15, pages 9-74 National Bureau of Economic Research, Inc.
    6. Peter A. Diamond & J. A. Mirrlees, 1968. "Optimal Taxation and Public Production," Working papers 22, Massachusetts Institute of Technology (MIT), Department of Economics.
    7. James Banks & Richard Blundell & Arthur Lewbel, 1994. "Tax reform and welfare measurement: do we need demand system estimation?," IFS Working Papers W94/11, Institute for Fiscal Studies.
    8. Banks, James & Blundell, Richard & Lewbel, Arthur, 1996. "Tax Reform and Welfare Measurement: Do We Need Demand System Estimation?," Economic Journal, Royal Economic Society, vol. 106(438), pages 1227-1241, September.
    9. Michael Cragg, 1991. "Do We Care? A Study of Canada's Indirect Tax System," Canadian Journal of Economics, Canadian Economics Association, vol. 24(1), pages 124-143, February.
    10. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    11. Carlos M. Urzúa, 2001. "Welfare consequences of a recent tax reform in Mexico," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 16(1), pages 57-72.
    12. King, Mervyn A., 1983. "Welfare analysis of tax reforms using household data," Journal of Public Economics, Elsevier, pages 183-214.
    13. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, pages 312-326.
    14. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    More about this item

    Keywords

    Ahmad-Stern approach; marginal tax reform;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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