Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82944
Authors: 
Agell, Jonas
Persson, Mats
Year of Publication: 
2000
Series/Report no.: 
Working Paper, Department of Economics, Uppsala University 2000:5
Abstract: 
In this paper, we analyze government budget balance within a simple model of endogenous growth. For the AK model, simple analytical conditions for a tax cut to be self-financing can be derived. The critical variable is not the tax rate per se, but the transfer-adjusted tax rate. We discuss some conceptual issues in dynamic revenue analysis, and we explain why previous studies have arrived at seemingly contradictory results. Finally, we perform an empirical study of the transfer-adjusted tax rates of the OECD countries to see which country has the highest potential for fiscal improvements; it turns out that only a few countries have any potential for such dynamic scoring.
Subjects: 
Laffer effects
intertemporal models
dynamic scoring
growth models
JEL: 
E62
O41
Document Type: 
Working Paper

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