Tax Elasticity Estimates for Capital Stocks

Fatih Yilmaz and Jean-Francois Wen

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: We use panel cointegration techniques to estimate the long-run user cost elasticity of capital (UCE) in a small open economy. The estimates exploit three sources of variation in Canadian tax policy: across provinces, industries, and years. The UCE is estimated to be between -1.1 and -1.3 for machinery and equipment. We also provide semi-elasticities of capital with respect to marginal effective tax rates (METR). Our construction of the user costs makes use of a detailed data set on federal and provincial tax policy variables.

Keywords: Capital taxation; User cost of capital elasticy; Marginal effective tax rate (search for similar items in EconPapers)
JEL-codes: H25 H32 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-pbe and nep-pub
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN ... g+Paperss/2019/19-01 (application/pdf)

Related works:
Journal Article: Tax Elasticity Estimates for Capital Stocks (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:1901

Access Statistics for this paper

More papers in Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey Contact information at EDIRC.
Bibliographic data for series maintained by Sermet Pekin () and Ilker Cakar () and ().