 Fiscal harmonization in view of the Euro adoption: Economic implications for PolandAndrzej Cieślik and Mehmet Burak Turgut Journal of Policy Modeling, 2021, vol. 43, issue 2, 394-415 Abstract: In this paper, we investigate the ex ante effects of fiscal policy harmonization that might be necessary for the adoption of the common currency on economic growth in Poland using a neoclassical dynamic two-sector general equilibrium model. We study two fiscal policy scenarios. In the first one, we adjust all taxes to German and EU-27 levels, respectively, while in the second one, we change only consumption taxes to German and EU-27 levels. We find that in the first scenario, the current Polish taxes yield the highest rate of growth due to lower capital taxation. However, in the second scenario, German and EU-27 taxes yield the highest rate of growth due to the lower consumption tax on capital-intensive good. From a policy perspective, our results suggest that fiscal policy with lower taxes on capital and capital-intensive goods can generate a higher rate of growth in the long-run. In the case of fiscal harmonization, our findings propose adopting only German or EU-27 consumption tax structure into the Polish tax system. Keywords: Common currency; Economic growth; Euro area; Fiscal harmonization; Poland (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:43:y:2021:i:2:p:394-415 DOI: 10.1016/j.jpolmod.2020.05.001 Access Statistics for this article Journal of Policy Modeling is currently edited by A. M. Costa More articles in Journal of Policy Modeling from Elsevier |
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