European Fiscal Harmonization and the French Economy

Author/Editor:

W. R. M. Perraudin ; Thierry Pujol

Publication Date:

October 1, 1990

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper examines the implications of European fiscal harmonization for the French economy using a general equilibrium model. The latter extends the overlapping generations simulation model of Auerbach and Kotlikoff in three ways. A well-developed external sector is included. Households face constraints in their borrowing. The population comprises “rich” and “poor” households with different labor productivities. The harmonization policy that involves cuts in VAT and savings taxes leads to welfare losses for both rich and poor approximately equivalent to one percent of GDP.

Series:

Working Paper No. 1990/096

Subject:

Consumption Consumption taxes Income and capital gains taxes National accounts Personal income tax Taxes Value-added tax

Notes:

Also published in Staff Papers, Vol. 38, No. 2, June 1991.

English

Publication Date:

October 1, 1990

ISBN/ISSN:

9781451949933/1018-5941

Stock No:

WPIEA0961990

Pages:

52

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