Growth Effects of Income and Consumption Taxes: Positive and Normative Analysis

Gian Maria Milesi-Ferrett and Nouriel Roubini ()
Authors registered in the RePEc Author Service: Gian Maria Milesi-Ferretti ()

No 5317, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The effects of income and consumption taxation are examined in the context of models in which the growth process is driven by the accumulation of human and physical capital. The different channels through which these taxes affect economic growth are discussed, and it is shown that in general the taxation of factor incomes (human and physical capital) is growth-reducing. The effects of consumption taxation on growth depend crucially on the elasticity of labor supply, and therefore on the specification of the leisure activity. The paper also derives implications for the optimal intertemporal choice of tax instruments.

JEL-codes: E62 O41 (search for similar items in EconPapers)
Date: 1995-10
Note: IFM PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Published as "Growth Effects of Income and Consumption Taxes", Journal of Money, Credit and Banking, Vol. 30, no. 4 (November 1998): 721-744.

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Related works:
Working Paper: Growth Effects of Income and Consumption Taxes: Positive and Normative Analysis (1995)
Working Paper: Growth Effects of Income and Consumption Taxes: Positive and Normative Analysis (1995)
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