Department of Economics and Business Economics

An Evaluation of the Revenue side as a source of fiscal consolidation in high debt economies

Research output: Working paperResearch

Documents

  • wp13_23

    Submitted manuscript, 1.11 MB, PDF document

Unsustainable levels of debt in some European economies are causing considerable strain in the Euro area. Successful debt consolidation in high debt economies is one of the most important important objective for the European policy makers. I use a dynamic general equilibrium closed economy model to compute the dynamic Laffer Curves for Portugal, Ireland, Greece and Spain for different class of taxes. The general equilibrium effects of the interaction of labor tax, consumption tax and capital tax is demonstrated. Location of each economy on its Laffer curve suggests that there exists a scope for considerable revenue generation by raising consumption and labor tax rates but no such possibilities exist for capital tax rate. Thus revenue generation with certain tax rates as instruments, may hold a key to successful and sustained debt reduction.
Original languageEnglish
Place of publicationAarhus
PublisherInstitut for Økonomi, Aarhus Universitet
Number of pages28
Publication statusPublished - 22 Oct 2013
SeriesEconomics Working Papers
Number2013-23

See relations at Aarhus University Citationformats

Download statistics

No data available

ID: 56516295