Tax reforms, "free lunches", and "cheap lunches" in open economies / prepared by Giovanni Ganelli and Juha Tervala.
This paper focuses on the macroeconomic and budgetary impact of tax reforms in a New Keynesian two-country model. Our results show that both income and consumption unilateral tax rate reductions do not constitute a "free lunch", in the sense that they have negative budgetary consequences f...
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