Taxes, growth and the current account 'tick-curve' effect

Day, Creina; Day, Garth

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Taxes, growth and the current account 'tick-curve' effect

Date

2010

Authors

Day, Creina

Day, Garth

Publisher

Blackwell Publishing Ltd

Abstract

This paper examines the dynamic and long run effects of a shift from income taxes to consumption taxes in a growing small open economy. We introduce a government sector that maintains a balanced budget and expenditure at a constant proportion of domestic