Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/76418 
Year of Publication: 
2003
Series/Report no.: 
CESifo Working Paper No. 916
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Two macro models - one for a closed economy and the other for a small open economy - are used to examine the scope for income redistribution and employment creation. In particular, the introduction of both a guaranteed annual income (basic income) and an employment subsidy are examined, and these policies are compared to a straightforward tax cut for (unskilled) labour. All initiatives are financed by a tax on capital. In the open-economy setting, capital is perfectly mobile, so there is a trade-off between the direct benefits of each policy, and the costs that follow from the out-migration of capital. The model is used to assess the relative importance of these competing effects.
Subjects: 
guaranteed annual income
subsidies
capital taxes
redistribution.
Document Type: 
Working Paper
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