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Growth, income taxes and consumption aspirations

Gustavo Marrero () and Alfonso Novales ()

Economics Letters, 2011, vol. 113, issue 3, 221-224

Abstract: In a Barro-type economy with exogenous consumption aspirations, raising income taxes favors growth even in the presence of lump-sum taxes. Such a policy is compatible with the behavior of private consumption, income taxes and growth rates observed in actual economies.

Keywords: Consumers’ aspirations; Income taxes; Public investment; Growth (search for similar items in EconPapers)
JEL-codes: E13 E62 O41 (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1016/j.econlet.2011.07.021

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