Investment tax credit in an open economy

Endogenous Credit Constraints, Human Capital Investment and Optimal Tax Policy

This paper employs a two-period life-cycle model to derive the optimal tax policy when educational investments are subject to credit constraints. Credit constraints arise from the limited commitment of debitors to repay loans and are endogenously determined by private banks under the non-default condition that individuals cannot be better off by defaulting. We show that the optimal redistributi...

Is the Tax Credit for SME in Chile an Effective Policy to Boost Investment?

The Credit Channel in an Emerging Economy

To date, there is no consensus about how frictions in the credit market affect the transmission of the monetary policy to the real economy. The traditional money channel states that when the Central Bank reduces its reserves, commercial banks are forced to reduce their demand for deposits. If prices are sticky, in the short-run a decrease in real monetary holdings should lead to higher real int...

Underground Economy And Tax Gap

Money Growth Rules in an Emerging Small Open Economy with an informal sector

This paper is concerned with the saddle-path stability of monetary growth rules in a two-country two-sector dynamic stochastic general equilibrium model. Alongside standard features of emerging economies, such as a combination of producer and local currency pricing for exports, fiscal dominance and oil exports, this model also incorporates informal labour and production sectors and examines how...