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dc.contributor.authorAngelopoulos, Konstantinosen_US
dc.contributor.authorFernandez, Bernardo X.en_US
dc.contributor.authorMalley, Jimen_US
dc.date.accessioned2011-07-19en_US
dc.date.accessioned2011-09-14T13:12:13Z-
dc.date.available2011-09-14T13:12:13Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/49465-
dc.description.abstractUsing a heterogeneous agent model allowing for different degrees of complementarity between capital, skilled and unskilled labour, this paper evaluates supply-side reforms consistent with lower public debt-to-GDP in the long-run. We find that, relative to the other tax reforms, capital tax cuts lead to the highest aggregate welfare but are skill-biased and can thus increase inequality in the long-run. Depending on the elasticity of substitution between capital and unskilled labour, falls in the capital tax can result in welfare losses for unskilled workers, even in the absence of other frictions and increases in other forms of taxation. On the other hand, reductions in labour taxes can hurt the capitalists. We also show that including the transition period in the welfare evaluation lowers the inequality effects of capital tax reduc-tions since the complementarity between capital and all labour inputs is higher in the short- than in the long-run. Finally, our results suggest that a form of irrational exuberance can arise after a tax cut under heterogeneous learning in the initial conditions after the reform.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper: Fiscal Policy, Macroeconomics and Growth 3504en_US
dc.subject.jelE25en_US
dc.subject.jelE62en_US
dc.subject.ddc330en_US
dc.subject.keywordtax reformen_US
dc.subject.keywordstructural heterogeneityen_US
dc.subject.keywordinequalityen_US
dc.subject.keywordadaptive learningen_US
dc.subject.stwSteuerreformen_US
dc.subject.stwÖffentliche Schuldenen_US
dc.subject.stwEinkommensverteilungen_US
dc.subject.stwRationale Erwartungen_US
dc.subject.stwWohlfahrtseffekten_US
dc.titleThe distributional consequences of supply-side reforms in general equilibriumen_US
dc.typeWorking Paperen_US
dc.identifier.ppn664382851en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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