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Moutos, Thomas
Scarth, William
Year of Publication: 
Series/Report no.: 
CESifo Working Paper No. 916
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.
guaranteed annual income
capital taxes
Document Type: 
Working Paper

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