Tax Efficiency in an Open Economy

Author/Editor:

Thierry Pujol ; W. R. M. Perraudin

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 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. 90/94

Subject:

English

Publication Date:

October 1, 1990

ISBN/ISSN:

9781451950663/1018-5941

Stock No:

WPIEA0941990

Format:

Paper

Pages:

14

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