On the Analytics of the Dynamic Laffer Curve

Arbeitspapier

In this paper, we analyze government budget balance within a simple model of endogenous growth. For the AK model, simple analytical conditions for a tax cut to be self-financing can be derived. The critical variable is not the tax rate per se, but the transfer-adjusted tax rate. We discuss some conceptual issues in dynamic revenue analysis, and we explain why previous studies have arrived at seemingly contradictory results. Finally, we perform an empirical study of the transfer-adjusted tax rates of the OECD countries to see which country has the highest potential for fiscal improvements; it turns out that only a few countries have any potential for such dynamic scoring.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 2000:5

Classification and Topics

• Classification: Wirtschaft ; Fiscal Policy ; One, Two, and Multisector Growth Models
• Subject: Laffer effects ; intertemporal models ; dynamic scoring ; growth models ; Laffer-Kurve ; Haushaltskonsolidierung ; Intertemporales Gleichgewicht ; Neue Wachstumstheorie ; Theorie ; OECD-Staaten

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Agell, Jonas ; Persson, Mats
• Event: Veröffentlichung
• (who): Uppsala University, Department of Economics
• (where): Uppsala
• (when): 2000

Further information

• Handle: http://hdl.handle.net/10419/82944
• URN: urn:nbn:se:uu:diva-2480
• Last update: 10.03.2025, 11:43 AM CET