Arbeitspapier

Economic Growth and Tax-Competing Leviathans

Is tax competition good for economic growth? The paper addresses this question by means of a simple model of economic growth in which a wasteful Leviathan state sets taxes and provides productive input. Wasteful behaviour is restricted by the voter, who reduces political support if her income is reduced. The intensity of tax competition is modelled via variation of a parameter measuring the mobility of the tax base. It is shown that the effects of increased mobility of the tax base on economic growth are ambiguous and that the elasticity of intertemporal substitution, which in this model equals the rate of intratemporal substitution between the government's own consumption and its political support, is a decisive variable in this context.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 1140

Klassifikation
Wirtschaft

Ereignis
Geistige Schöpfung
(wer)
Rauscher, Michael
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2004

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Rauscher, Michael
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2004

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