Tax Efficiency in an Open Economy
Summary:
This note assesses the relative efficiency of different tax bases in an open economy. If terms of trade effects are large, lump-sum taxation may be inferior to distortionary consumption or wage taxes. This result is demonstrated analytically using a simple neoclassical model. An overlapping generations, general equilibrium, simulation model is then employed to show the empirical significance of the effects involved.
Series:
Working Paper No. 1990/094
Subject:
Consumption Consumption taxes Labor supply Personal income tax Terms of trade
English
Publication Date:
October 1, 1990
ISBN/ISSN:
9781451950663/1018-5941
Stock No:
WPIEA0941990
Pages:
14
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