TY  - JOUR
AU  - Stokey,Nancy L.
AU  - Rebelo,Sergio
TI  - Growth Effects of Flat-Rate Taxes
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 4426
PY  - 1993
Y2  - August 1993
UR  - http://www.nber.org/papers/w4426
L1  - http://www.nber.org/papers/w4426.pdf
N1  - Author contact info:
Nancy Stokey
Department of Economics
University of Chicago
1126 East 59th Street
Chicago, IL 60637
Tel: 773/702-0915
Fax: 773/834-3452
E-Mail: nstokey@uchicago.edu

Sergio Rebelo
Northwestern University
Kellogg School of Management
Department of Finance
Leverone Hall
Evanston, IL  60208-2001
Tel: 847/467-2329
Fax: 847/491-5719
E-Mail: s-rebelo@northwestern.edu
AB  - Recent estimates of the potential growth effects of tax reform vary widely, ranging from zero (Lucas 1990) to eight percentage points (Jones, Manuelli, and Rossi 1993). Using an endogenous growth model, we assess which model features and parameter values are important for determining the quantitative impact of tax reform. We find that the critical parameters are factor shares, depreciation rates, the elasticity of intertemporal substitution, and the elasticity of labor supply. The elasticities of substitution in production, on the other hand, are relatively unimportant. The quantitative estimates in several recent papers are compared with each other and with some of the evidence from U.S. experience.
ER  -