Labour taxes, market size and productivity growth Domenico Ferraro, Soroush Ghazi, Pietro F. Peretto
By: Ferraro, Domenico
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Contributor(s): Ghazi, Soroush
| Peretto, Pietro F
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Item type | Current location | Home library | Call number | Status | Date due | Barcode |
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Artículos | IEF | IEF | OP 282/2023/654-2 (Browse shelf) | Available | OP 282/2023/654-2 |
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OP 282/2023/653-3 Tax revenues in low-income countries | OP 282/2023/654 The Economic Journal | OP 282/2023/654-1 The dark side of transparency | OP 282/2023/654-2 Labour taxes, market size and productivity growth | OP 282/2023/655 The Economic Journal | OP 282/2023/656 The Economic Journal | OP 282/2024/134/662 The Economic Journal |
Resumen.
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How do changes in labour taxes affect innovation and aggregate productivity growth? To answer this question, we propose a quantitative, general equilibrium growth model featuring product and quality innovation with endogenous market structure, estimate its parameters and provide empirical validation for the propagation mechanism of labour tax changes. We find that a temporary cut in flat-rate labour taxes produces a growth acceleration in aggregate productivity, permanently increasing the path of real GDP per capita. Moreover, such permanent gains are sizeable even without long-run growth effects.
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