NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Growth Effects of Income and Consumption Taxes: Positive and Normative Analysis

Gian Maria Milesi-Ferrett, Nouriel Roubini

NBER Working Paper No. 5317
Issued in October 1995
NBER Program(s):   IFM   PE

The effects of income and consumption taxation are examined in the context of models in which the growth process is driven by the accumulation of human and physical capital. The different channels through which these taxes affect economic growth are discussed, and it is shown that in general the taxation of factor incomes (human and physical capital) is growth-reducing. The effects of consumption taxation on growth depend crucially on the elasticity of labor supply, and therefore on the specification of the leisure activity. The paper also derives implications for the optimal intertemporal choice of tax instruments.

download in pdf format
   (492 K)

email paper

This paper is available as PDF (492 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w5317

Published: Published as "Growth Effects of Income and Consumption Taxes", Journal of Money, Credit and Banking, Vol. 30, no. 4 (November 1998): 721-744.

Users who downloaded this paper also downloaded these:
Engen and Skinner w5826 Taxation and Economic Growth
King and Rebelo w3338 Public Policy and Economic Growth: Developing Neoclassical Implications
Easterly and Rebelo w4499 Fiscal Policy and Economic Growth: An Empirical Investigation
Auerbach w12307 The Choice Between Income and Consumption Taxes: A Primer
Stokey and Rebelo w4426 Growth Effects of Flat-Rate Taxes
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us