Effect of the tax system on R&D intensity, growth and wages and cosumption share Óscar Afonso, Ana María Bandeira, Manuela Magalhães
By: Afonso, Oscar
.
Contributor(s): Bandeira, Ana Maria | Magalhães, Manuela.
Material type: 
ArticlePublisher: 2017Subject(s): SISTEMA FISCAL | DESARROLLO ECONOMICO | RENTA | CONSUMO | MODELOS ECONOMETRICOSOnline resources: Click here to access online
In:
Australian Economic Papers v. 56, n. 4, December 2017, p. 271-291Summary: We propose a general equilibrium knowledge-driven (semi-)endogenous-growth model with horizontal R&D, which is extended to consider two types of labour, skilled and unskilled, and exogenous government expenditure, financed through taxes on financial assets and on labour income, to analyse the implications of the tax system on R&D intensity, economic growth, wage inequality and consumption share in the output.
In particular, we show that: (i) taxes have negative influence in the consumption share, being higher the marginal effect of the labour-income tax; (ii) for any given government expenditure share, an increase (a decrease) in financial-assets tax decreases (increases) the labour-income tax; (iii) only the financial-assets tax affects negatively the R&D intensity and the skill-premium; thus, to reduce the skill-premium the
financial-assets tax must increase; (iv) ignoring the effect on wage inequality and on R&D intensity, taxes are substitutes.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 1718/2017/4-1 (Browse shelf) | Available | OP 1718/2017/4-1 |
Disponible en formato electrónico a través de la Biblioteca del IEF.
Resumen.
We propose a general equilibrium knowledge-driven (semi-)endogenous-growth model with horizontal R&D, which is extended to consider two types of labour, skilled and unskilled, and exogenous government expenditure, financed through taxes on financial assets and on labour income, to analyse the implications of the tax system on R&D intensity, economic growth, wage inequality and consumption share in the output.
In particular, we show that: (i) taxes have negative influence in the consumption share, being higher the marginal effect of the labour-income tax; (ii) for any given government expenditure share, an increase (a decrease) in financial-assets tax decreases (increases) the labour-income tax; (iii) only the financial-assets tax affects negatively the R&D intensity and the skill-premium; thus, to reduce the skill-premium the
financial-assets tax must increase; (iv) ignoring the effect on wage inequality and on R&D intensity, taxes are substitutes.
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