'Fiscal Devaluation' and Fiscal Consolidation : the VAT in Troubled Times / Ruud De Mooij, Michael Keen.

Format:

Book

Author/Creator:

Mooij, Ruud A. de, author.

Keen, Michael, author.

Series:

Working paper series (National Bureau of Economic Research) ; Number 17913.

Working paper series (National Bureau of Economic Research) ; Number 17913

Language:

English

Subjects (All):

Devaluation of currency.

Fiscal policy--Econometric models.

Fiscal policy.

Value-added tax--Econometric models.

Value-added tax.

Taxation--Econometric models.

Taxation.

Physical Description:

1 online resource (44 pages).

Place of Publication:

Cambridge, MA : National Bureau of Economic Research, 2012.

Summary:

This paper focuses on two core tax design issues that arise in addressing current fiscal challenges It first explores the idea, prominent in troubled Eurozone countries, of a 'fiscal devaluation:' shifting from social contributions to the VAT as a way to mimic a nominal devaluation. Empirical evidence is presented which suggests that in Eurozone countries this may indeed improve the trade balance quite sizably in the short-run, though, as theory predicts, the effects eventually disappear. The paper then assesses the wider scope for VAT reform in meeting fiscal consolidation needs, developing and beginning to apply a methodology for finding additional VAT revenue in ways less distortionary and fairer than further raising the standard rate.

Notes:

Description based on publisher supplied metadata and other sources.