Taxes, the Speed of Convergence, and Implications for Welfare Effects of Fiscal Policy

Benjamin Russo

Southern Economic Journal, 2002, vol. 69, issue 2, 444-456

Abstract: Previous studies suggest that income taxes do not affect the convergence speed in neoclassical and new growth models. Those studies use very simple tax structures. This paper shows that a relation between taxes and convergence speed emerges if tax benefits are included in standard macroeconomic models. A welfare example suggests that the economic impact could be large even if the absolute size of the effect of taxes on convergence speed is small.

Date: 2002
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https://doi.org/10.1002/j.2325-8012.2002.tb00502.x

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Persistent link: https://EconPapers.repec.org/RePEc:wly:soecon:v:69:y:2002:i:2:p:444-456

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