IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Experimentos de Política Fiscal por el Lado de la Oferta en un Modelo Monetario de Crecimiento Endógeno

In an endogenous growth model with human capital acumulation,I discuss the feasibility of a reduction in a marginal tax rate on labor and capital income, given a predeterminated path for government expenditures. A permanent tax cut is feasible if it can be compensated by an increase in the tax base due to a dynamic Laffer curve effect. This means that a same sequence of expenditures can be financed allowing the government to balance its budget in the long-run. I show that the largest feasible reduction in labor income tax rates produce a higher welfare gain than the largest feasib le reduction in capital income tax rates. However, reductions incapital income taxes can be preferred by governments who care more about the level of deficits and debt than about consumers’ welfare. Finally, I analyze the effect on welfare if reductions in tax rates when the government can finance its expenditure through taxes on capital and labor income or by issuing money and debt. I also discuss whether issuing debt or issuing money is preferred by the government in order to finance the deficit led by tax rates cuts.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL:
Download Restriction: no

Paper provided by Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico in its series Documentos de Trabajo del ICAE with number 0211.

in new window

Length: pages 35
Date of creation: 2002
Handle: RePEc:ucm:doicae:0211
Contact details of provider: Phone: +34 913942604
Fax: 913942531
Web page:

More information through EDIRC

Order Information: Postal: Facultad de Ciencias Económicas y Empresariales. Pabellón prefabricado, 1ª Planta, ala norte. Campus de Somosaguas, 28223 - POZUELO DE ALARCÓN (MADRID)
Web: Email:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ucm:doicae:0211. 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: (Águeda González Abad)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.