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Capital Income Tax, Linear R&D Technology, and Economic Growth

Yohei Tenryu

MPRA Paper from University Library of Munich, Germany

Abstract: This paper shows that, in a R&D-based growth model in which vertical and horizontal innovations occur simultaneously, increasing the capital income tax leads to faster growth. For this result to hold, the production function for both vertical and horizontal innovations must have constant returns to scale.

Keywords: Endogenous growth; Capital income tax; Vertical innovation; Horizontal Innovation; Scale effect. (search for similar items in EconPapers)
JEL-codes: H20 J22 O31 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-gro, nep-ino, nep-knm and nep-pbe
Date: 2017-04-22
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