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On economic growth and investment income taxation in a creative region

Pierce J. Donovan and Amitrajeet Batabyal ()

International Review of Economics & Finance, 2015, vol. 38, issue C, 67-72

Abstract: We study economic growth and investment income taxation in a region that is creative in the sense of Richard Florida. Specifically, this region possesses both creative and physical capital. Of the two sectors in this region, one produces final consumption goods and the other produces investment or physical capital goods. Our analysis of the working of this creative region leads to three results. First, we derive an analytic expression that links the growth rate of the relative price of physical capital goods to the growth rate of physical capital in the consumption goods sector. Second, we highlight the connection between the growth rates of consumption and that of physical capital in the consumption goods sector. Finally, we analyze the effect that the taxation of investment income has on the equilibrium growth rate of consumption in our creative region.

Keywords: Creative capital; Creative region; Economic growth; Investment income; Taxation (search for similar items in EconPapers)
JEL-codes: R11 O41 H20 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:38:y:2015:i:c:p:67-72

DOI: 10.1016/j.iref.2015.01.002

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