ECONOMIC EFFECTS OF REGIONAL TAX INCENTIVES: A GENERAL EQUILIBRIUM APPROACH

Alexandre Alves Porsse (), Eduardo Haddad () and Eduardo Ribeiro

Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33th Brazilian Economics Meeting] from ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]

Abstract: Tax incentives are common instruments in regional policies used to attract new investments and promote increase in employment and income, but the impact on regional public finances is very controversial. This paper uses an interregional computable general equilibrium model for the Brazilian economy to evaluate the net effects of tax incentives on the regional government revenues. The model takes into account the structural relationships between two regions and the specific characteristics of the Brazilian federalism that affects regional public finances. The theoretical specification allows capturing indirect and induced effects of the new investments and the net output of such incentive policies for the regional government revenues.

JEL-codes: C68 R13 H73 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo and nep-pbe
Date: 2005
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Persistent link: http://EconPapers.repec.org/RePEc:anp:en2005:124

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