Capital Taxation, Growth, and Non-renewable Resources
نویسندگان
چکیده
The conventional view within the endogenous growth literature is that interest income taxes impede economic growth and investment subsidies promote economic growth. The present paper lays out a simple framework to see whether this is still true when non-renewable resources enter the ”growth engine” in an essential way. It is not! The framework allows a rich set of determinants of longrun growth, including some fiscal policy measures, but interest income taxes and investment subsidies are not among these. The results not only contrast with the modern literature on taxes and endogenous growth, but also with observations in the literature from the 1970’s on non-renewable resources and taxation observations which were not based on general equilibrium considerations.
منابع مشابه
Growth and non-renewable resources: The di¤erent roles of capital and resource taxes
We contrast e¤ects of taxing non-renewable resources with the e¤ects of traditional capital taxes and investment subsidies in an endogenous growth model. In a simple framework we demonstrate that when non-renewable resources are a necessary input in the sector where growth is ultimately generated, interest income taxes and investment subsidies can no longer a¤ect the long-run growth rate, where...
متن کاملGrowth and non-renewable resources: The different roles of capital and resource taxes
We contrast effects of taxing non-renewable resources with the effects of traditional capital taxes and investment subsidies in an endogenous growth model. In a simple framework we demonstrate that when non-renewable resources are a necessary input in the sector where growth is ultimately generated, interest income taxes and investment subsidies can no longer affect the long-run growth rate, wh...
متن کاملAn Analysis the Effect of Capital Taxation on Allocation of Resources: A Dynamic Equilibrium Model Approach
Abstract T he return of capital is fundamental to the intertemporal allocation of resources by changing the consumption behavior and capital accumulation over time. Taxation on return of capital increases the marginal product of capital, meaning that capital stock is lower than when capital is not taxed, which results decreased growth and welfare in steady state. This pape...
متن کاملOptimal Energy Transition and Taxation of Non - Renewable Resources
This paper investigates the optimal taxation path of a non-renewable resource in the presence of an imperfect substitute renewable resource. We present an optimal growth model and characterize the social optimum and the decentralized equilibrium. We show that the economy gradually reduces the share of non-renewable resource and converges to a steady state in which it uses only the renewable res...
متن کاملEffects of Different Approaches to Use of Non-Renewable (Oil) Resource’s Revenues on Iran’s Economic Growth
In this paper, we use the insights of the Real Business Cycles School, to calculate effects of different approaches to allocation of non-renewable (oil) resources’ revenues on Iran’s economic growth. We compare three different approaches, namely allocating the total revenue to the government, allocating some part of the revenue to the government and the rest to investing and allocating the reve...
متن کامل