IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/927.html
   My bibliography  Save this paper

General equilibrium effects of investment incentives in Mexico

Author

Listed:
  • Feltenstein, Andrew
  • Shah, Anwar

Abstract

Mexico has experimented with several tax instruments designed to promote private capital formation. Among such initiatives were general and industry-specific tax credits, employment tax credits, and corporate tax credits. The authors examine relative efficacy of such instruments using a dynamic computable general equilibrium model. They carry out model simulations using three equal-yield investment incentive scenarios: increases in investment tax credits, increases in employment tax credits, and an equivalent reduction in the corporate tax rate. The authors present outlines of the tax policy environment with model details and they highlight alternate tax incentives regimes. Conclusions and summary results are provided by the authors.

Suggested Citation

  • Feltenstein, Andrew & Shah, Anwar, 1992. "General equilibrium effects of investment incentives in Mexico," Policy Research Working Paper Series 927, The World Bank.
  • Handle: RePEc:wbk:wbrwps:927
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1992/06/01/000009265_3961003032607/Rendered/PDF/multi0page.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Auerbach, Alan J & Hines, James R, Jr, 1988. "Investment Tax Incentives and Frequent Tax Reforms," American Economic Review, American Economic Association, vol. 78(2), pages 211-216, May.
    2. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70, pages 215-215.
    3. Feltenstein, Andrew, 1986. "An intertemporal general equilibrium analysis of financial crowding out : A policy model and an application to Australia," Journal of Public Economics, Elsevier, vol. 31(1), pages 79-104, October.
    4. Shoven, John B, 1976. "The Incidence and Efficiency Effects of Taxes on Income from Capital," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1261-1283, December.
    5. Feltenstein, Andrew & Lebow, David & Sibert, Anne, 1988. "An analysis of the welfare implications of alternative exchange rate regimes: An intertemporal model with an application," Journal of Policy Modeling, Elsevier, vol. 10(4), pages 611-629.
    6. Feltenstein, Andrew, 1992. "Oil prices and rural migration: the Dutch disease goes south," Journal of International Money and Finance, Elsevier, vol. 11(3), pages 273-291, June.
    7. Feltenstein, Andrew & Morris, Stephen, 1990. "Fiscal stabilization and exchange rate instability : A theoretical approach and some policy conclusions using Mexican data," Journal of Public Economics, Elsevier, vol. 42(3), pages 329-356, August.
    8. Feltenstein, Andrew & Morris, Stephen, 1988. "Fiscal stabilization and exchange rate instability," Policy Research Working Paper Series 74, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cerqueti, Roy & Coppier, Raffaella, 2011. "Economic growth, corruption and tax evasion," Economic Modelling, Elsevier, vol. 28(1-2), pages 489-500, January.
    2. Helene Poirson Ward, 2006. "The Tax System in India; Could Reform Spur Growth?," IMF Working Papers 06/93, International Monetary Fund.
    3. Venegas-Martinez, Francisco, 2001. "Temporary stabilization: A stochastic analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 25(9), pages 1429-1449, September.
    4. repec:dgr:rugsom:99c01 is not listed on IDEAS
    5. Grégoire Garsous & David Corderi & Mercedes Velasco, 2015. "Tax Incentives and Job Creation in the Tourism Industry of Brazil," IDB Publications (Working Papers) 7324, Inter-American Development Bank.
    6. Ramirez Verdugo, Arturo, 2005. "Tax Incentives and Business Investment: New Evidence from Mexico," MPRA Paper 2272, University Library of Munich, Germany, revised 04 Oct 2006.
    7. Emmanuel C. Mamatzakis, 2007. "An Analysis of the Impact of Public Infrastructure on Productivity Performance of Mexican Industry," CESifo Working Paper Series 2099, CESifo Group Munich.
    8. repec:eee:wdevel:v:96:y:2017:i:c:p:87-101 is not listed on IDEAS
    9. Chen, Been-Lon & Chiang, Yeong-Yuh & Wang, Ping, 2005. "Evaluation of interest tax policies in a model of finance and growth," Journal of Macroeconomics, Elsevier, vol. 27(3), pages 533-552, September.
    10. Kildegaard, Arne, 2001. "Fiscal reform, bank solvency, and the law of unintended consequences: a CGE analysis of Mexico," The North American Journal of Economics and Finance, Elsevier, vol. 12(1), pages 55-77, March.
    11. Egor Kraev & Bishop Akolgo, 2005. "Assessing Modelling Approaches to the Distributional Effects of Macroeconomic Policy," Development Policy Review, Overseas Development Institute, vol. 23(3), pages 299-312, May.
    12. Ball, Sheryl & Feltenstein, Andrew, 1998. "Basic macroeconomic options for Bangladesh: A numerical analysis," Journal of Asian Economics, Elsevier, vol. 9(2), pages 281-305.
    13. Thissen, Mark, 1998. "A classification of empirical CGE modelling," Research Report 99C01, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    14. Feltenstein, Andrew & Ha, Jiming, 1999. "An analysis of the optimal provision of public infrastructure: a computational model using Mexican data," Journal of Development Economics, Elsevier, vol. 58(1), pages 219-230, February.

    More about this item

    Keywords

    International Terrorism&Counterterrorism; Economic Theory&Research; Environmental Economics&Policies; Banks&Banking Reform; Public Sector Economics&Finance;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:927. 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: (Roula I. Yazigi). General contact details of provider: http://edirc.repec.org/data/dvewbus.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.