@techreport{Grossmann2010Quantifying,
abstract = {The optimal mix of growth policies is determined within a comprehensive endogenous growth model. The analysis captures important elements of the tax-transfer system and accounts for transitional dynamics. Currently, for calculating corporate taxable income US firms are allowed to deduct approximately all of their capital and R&D costs from sales revenue. Our analysis suggests that this policy leads to severe underinvestment in both R&D and physical capital. We find that firms should be allowed to deduct between 2-2.5 times their R&D costs and about 1.5-1.7 times their capital costs. Implementing the optimal policy mix is likely to entail huge welfare gains.},
address = {M\"{u}nchen},
author = {Volker Grossmann and Thomas M. Steger and Timo Trimborn},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {H20; O30; O40; 330; economic growth, endogenous technical change; optimal growth policy; tax-transfer system; transitional dynamics; Wachstumspolitik; Investitionspolitik; Forschungssubvention; Steuerbeg\"{u}nstigung; K\"{o}rperschaftsteuer; Steuerwirkung; Optimales Wachstum; Endogener technischer Fortschritt; Theorie; USA},
language = {eng},
number = {3092},
publisher = {CESifo},
title = {Quantifying optimal growth policy},
type = {CESifo working paper Fiscal Policy, Macroeconomics and Growth},
url = {http://hdl.handle.net/10419/38919},
year = {2010}
}
