Download Fiscal Policy Under Keynesian Models

Economic Modelling: Lecture 5
Fiscal Policy and Golden Rules to
Fine-Tune the Economy
http://www.hmrc.gov.uk/stats/index.htm
http://www.hm-treasury.gov.uk/economic_data_and_tools/
forecast_for_the_uk_economy/data_forecasts_index.cfm
1
Government Budget Deficit Percent of GDP
8
A3: CYCLICALLY ADJUSTED BUDGET BALANCES
Projections
6
4
2
-4
-6
Public sector net borrowing
Surplus on current budget
Contents
http://www.hm-treasury.gov.uk/economic_data_and_tools/finance_spending_statistics/finexp_index.cfm
2
2011-12
2010-11
2008-09
2009-10
2007-08
2006-07
2005-06
2003-04
2004-05
2002-03
2001-02
2000-01
1999-00
1997-98
1998-99
1996-97
1995-96
1994-95
1992-93
1993-94
1991-92
1990-91
1989-90
1988-89
1986-87
1987-88
1985-86
1984-85
1983-84
1981-82
1982-83
1980-81
-2
1979-80
0
C3: GOVERNMENT RECEIPTS BY
FUNCTION 2006-2007 (PROJECTIONS)
Council tax, 22.54609297,
4.354%
Income tax, 146.0614237,
28.204%
Other*, 75.41787888,
14.563%
Business rates,
21.48164123, 4.148%
National Insurance
17%
VAT, 76.153, 14.705%
Corporation tax,
48.04208195, 9.277%
Excise duties, 39.662,
7.659%
*Other receipts include capital taxes, stamp duties, vechile excise duties, and some other tax and non-tax receipts- for example interest and dividends
3
Contents
http://www.hm-treasury.gov.uk/economic_data_and_tools/finance_spending_statistics/finexp_index.cfm
http://www.hm-treasury.gov.uk/economic_data_and_tools/finance_spending_statistics/finexp_index.cfm
4
2007-08
2006-07
2005-06
2004-05
2003-04
2002-03
2001-02
2000-01
1999-00
1998-99
1997-98
1996-97
1995-96
1994-95
1993-94
1992-93
1991-92
1990-91
1989-90
1988-89
1987-88
1986-87
1985-86
1984-85
1983-84
1982-83
1981-82
1980-81
Ratio of Government Spending to GDP in UK
49
B3: TME (% GDP)
47
45
43
41
39
37
Contents
B4: GOVERNMENT SPENDING BY
FUNCTION 2006-07 (Projections)
Social protection**
27%
Personal social services
5%
Other*
10%
Health
16%
Debt interest
5%
Public order and safety
6%
Housing and environment
Defence
4% Industry, agriculture,
6%
employment and training
4%
Education
13%
Transport
4%
*Includes spending on general public services; recreation, culture and religion; international cooperation and development; public service pensions; plus spe
yet to be allocated and some accounting adjustments.
**Includes tax credit payments in excess of an individual's tax liability, which are now counted in AME, in line with OECD guidelines
Conten
5
http://www.hm-treasury.gov.uk/economic_data_and_tools/finance_spending_statistics/finexp_index.cfm
What is a golden rule of fiscal policy?
Why is this necessary?
Golden rule of Fiscal Policy:
Borrow only to invest
Balance budget over the business cycle
Theory on economic policy:
Rules are better than discretion
Scope for discretion provides opportunity to cheat
public
Tools: Inflation Unemployment GAME
Nash Bargaining: non-cooperative solution
Cooperative Solution is Pareto Optimal
Cooperation generates credibility
Backward Induction: Cooperative Solution of a dynamic Game
6
Objectives of Fiscal Policy
•
•
•
•
•
•
•
•
•
•
•
•
Macroeconomic stabilisation
Higher growth rate of output
Full employment
Stable prices:
low rate of inflation
stable interest and exchange rates
Equity: horizontal and vertical (tax/transfer)
Efficiency in resource allocation
Provision of public goods
Externality: max positive externality, min neg. ext.
Market failure
Public private partnership (education, health, R&D)
7
Instruments of Fiscal Policy
• Taxes
Direct: income, profit, wealth
Indirect: VAT, tariff, excise, business
Subsidies: goods/services and for use of inputs
• Spending
Public goods: defence, law / order, national parks
Semi-public goods: education, health, R&D
• Debt
Borrowing from the private sector : Crowding out
From the central banks : infaltion8
Theory of Ricardian equivalence
8
Who bears the burden of taxes and who
benefit from the public spending?
• Producers
Labour supply (work hours, leaves, retirement)
Taxed sectors vs. subsidised sector
Domestic vs. foreign goods
Excise duties
• Consumers
VAT and market prices
Sin goods (tobacco, alcohol,
• Traders: imports and exports, custom unions
9
Microeconomic Tools To Evaluate the Impact of Taxes
10
Impact of Increase in Taxes in Demand for a commodity
Income and Price Effects: Hicksian and Slutsky
Decomposition
X2
I2 Compensating Variation
B
I1
Compensating
variation
c
Reduction in
Welfare due
to increase in taxes
MU 2
P2
=
c MU 1 P1 (1 + t )
MU 2
aMU
1
=
P2
P1
b
B
BT
0
x2
x1
Substitution
effect
c x0
X1
Income effect
11
Impact of Increase in Taxes in Demand for a commodity
Income and Price Effects: Hicksian and Slutsky Decomposition
Equivalent Variation
X2
C
I2
Equivalent
variation
I1
B
Reduction in
Welfare due
to increase in taxes
c
b
MU 2 P2
=
MU 1 P1
MU 2
P2
=
MU 1 P1 (1 + t )
a
B
BT
0
x2
Income
effect
x1
c
x0
X1
Substitution effect
12
Compensating Variation
1
2
1
1
2
2
Base utility u 0 = x x , with budget
( p1 , p 2 ) = (1,1)
m = p1 x1 + p 2 x 2 if
m x = m
demand functions x1 = 2 p , 2 2 p , given
2
1
(x1 , x 2 ) = (50,50 ) .
Tax on good one rises to 2,
m =100
( p1 , p 2 ) = (2,1) , income
m
100
x =
=
= 25 ,
remains the same m =100, 1
2 p1 2 × 2
x2 =
m
100
=
= 50 .
2 p 2 2 ×1
How much income need to be compensated to this consumer
to maintain at the old level of utility,
1
1
1
2
1
2
2
2
⎛ m ' ⎞ ⎛ m' ⎞
u 0 = 50 1 50 1 = ⎜ ⎟ ⎜ ⎟ = 50 Î
⎝4⎠ ⎝2⎠
m ’=141,
Therefore compensating variation is 141-100=41.
Compensating variation is positive for a price rise.
13
Equivalent Variation
How much money should be taken away from the
consumer in the original prices to make him/her achieve
the utility level after the price change.
1
1
2
1
2
1
1
2
1
2
⎛ m' ⎞ ⎛ m' ⎞
u n = 25 50 = ⎜ ⎟ ⎜ ⎟ = 5 × 5 × 2
⎝2⎠ ⎝2⎠
m' = 2 × 5 × 5 × 2 = 70.7
EV = 70.7-100 = -29.3.
Equivalent variation in negative for a rise in price level
14
Money Metric Measure of Changes in Welfare Due to
Tax Reforms
Equivalent
Variation
Compensating
Variation
Rise in Fall in tax
tax
Negative Positive
Positive
Negative
Why General equilibrium models to evaluate tax reforms:
Need to consider income and substitution effects in individual markets
and take account of multiple rounds of knock on effects to measure the
Impacts of tax changes more accurately.
15
Measuring the Impact of Taxes in the Economy
S’
S
PD
CL
t
P
PL
PS
D
0
q’
q
16
Take regular demand and supply functions
D =a-bP
S = -c+dP
equilibrium price and quantity
P=
a+c
ad + bc
q
=
b+d ;
b+d .
A tax on the commodity creates a wedge between
the price received by suppliers and price paid by
consumers.
This distorts the market equilibrium and allocation.
D = a − bP
D
S = −c + dP S
Price that consumers pay is higher with taxes
PD = PS +t
17
Demand equals supply in equilibrium:
a − bP D = −c + dP S
(
)
a − b P S + t = −c + dP S
a − bP S − bt = −c + dP S
a + c − bt = bP S + dP S
S
Price received by suppliers: P =
a + c − bt
b+d
Price paid by consumers:
PD = PS +t =
a + c − bt
a + c + dt
+t =
b+d
b+d
The equilibrium quantity in the distorted market :
⎛ a + c + dt ⎞ ad − bc + bdt
D = a − bP D = a − b⎜
⎟=
b+d
⎝ b+d ⎠
18
When supply is perfectly elastic all burden of tax falls on to
the consumers.
S’
P+t
t
S
P
D
q’
q
19
When Demand is Perfectly Inelastic All Burden taken by Suppliers
S
P
t
P-t
D
q
20
First Round Impact of Taxes: Partial Equilibrium Analysis
S’
S
Burden to
consumers
Pc
P
Burden to
producers
Ps
D
0
Q’
Q
Equilibrium in a Single Market
21
Tax Credit Promotes Investment
Why Manufacturers Lobby for a Tax Credit?
[r + δ − π ]
K
(1 − τ )[r + δ − π K ]
MPK =
0
K1
αk
K2
22
α −1
Impact of Taxes and Transfer on Labour Supply of Individuals
Why one should work more if entitled for
benefit?
u
Consumption
b
No benefit equilibrium
B_T
a
Benefit equilibrium
u
Benefit
0
Leisure
Labour
L
23
Higher taxes reduce saving and investment and growth
ST
Saving
b
r+t
r=i-π
a
Investment
0
Stx
S*, I*
Saving and Investment
24
Macroeconomic Tools to Evaluate the Impacts of Taxes
25
Macroeconomic Stabilisation Role of Tax and Spending
T = tY
G=T
Tax
and
G
Spending
T>G
Surplus in boom
G
T<G
Deficit in
recession
0
YF
Income
T
26
How High Should be Public Spending?
Costs of public spending
Cost and
Benefit
Of spending
C=B
c
a
b
Benefits of spendin
0
G*
Size of spending
27
How much should be the tax rate to maximise the government revenue ?
Tax compliance
R-max
Tax avoidance
Tax evasion
Revenue
R-low
Revenue=F(t)
t-Low
t-Rmax
tH
Tax rate
28
Balanced Budget Multiplier with Lump-Sum Taxes
The real national income is given by the IS Curve:
1
[
Y=
c0 + I + G − c1T ]
1 − c1
.
Positive Government expenditure multiplier:
Negative tax multiplier:
The balanced budget multiplier:
1
∂Y
=
∂G 1 − c1
c1
∂Y
=−
∂T
1 − c1
∂Y ∂Y
=1/(1-c1) - c1/(1- c1) = 1
+
∂G ∂T
A change of 100 in both G and T also raised income by 100.
Balanced change in G and T is not macro economically neutral.29
Automatic Stabiliser with Proportional Taxes
C = c0 + c1YD
Consumption:
Disposable income:
Tax Revenue
Income (IS curve):
0 < c1 < 1
YD = Y − T
T = t 0 + t1Y
0 < t1 < 1
Y = c0 + c1YD + I + G
1
Y=
* [c 0 - c1 t 0 + I + G ]
(1 - c1 + c1 t 1 )
The multiplier = 1/(1-c1+c1t1) <1/(1- c1),
so the economy responds less to changes in
autonomous spending when t1 is positive.
High T when Y is high.
Low T when Y is low.
30
Macroeconomic Forecasting and Revenue Projection
1e6
Forecasts
C
Forecasts
300000
I
250000
800000
200000
600000
150000
2000
2005
Forecasts
2010
2015
2000
800000
T
2005
Forecasts
2010
2015
2010
2015
2010
2015
M
750000
600000
500000
400000
2000
10
2005
Forecasts
2010
2015
2000
10
i
2005
Forecasts
Inflation
0
0
-10
-20
-10
2000
2005
2010
2015
2000
2005
31
Results from GiveWin PcGive.
Laffer Curve Model:A Numerical Example
Rt =50t −2t 2
Where R is revenue in billion of pounds, t is the tax rate.
The tax rate that maximises the revenue is given by
∂Rt
=50−4t = 0 Î t = 12.5
∂t
There are two tax rates that can raise the same revenue.
200=50t−2t 2 Î
2 −4(100)
−
(
−
25
)
±
(
−
25
)
t 2 −25t +100= 0 ;t =
=
1
2
t = 25±15=5,20
1
2
32
General Equilibrium Analysis on Impact of Taxes
33
Government
Finance
Tax/subsidy
Markets
Households
Economy
(income categories)
Trade
Markets
Firms
(Sectors of Production)
Communication
Transport
ROW
General Equilibrium Models Assume Clearing of all Markets
But has no trade-off between unemployment and inflation.
34
General Equilibrium Impact of Taxes
• First round effects: incidence of tax
– Reduction (increase) in
•
•
•
•
•
•
household income
Profit of firms
Demand for products by households and foreigners
Supply of goods and services by firms
Government spending
Investment spending
• Second round effects: Gradual shifting of the burden of taxes
– Increase or decrease in prices of commodities
– Collection of revenue
• Final impacts
– When all shifting burdens works through-out the economy
35
General Equilibrium and Knock on Effects in Different Markets
Balance of Payment analysis: Graphical approach
Labour Market
LD
LS
Goods and Money
Money market
IS
AS LM
MD MS
Wage
i
Domestic bonds
BS
BD
i
Foreign Bonds
i*
Foreign Exchange
i
Interest rt
L
Y
M/P
DB
FB
exchange rate
Output
Y
Employment
Output
P
Price
Real money balance
Portfolio allocation
e
36
Raw Data (National
Accounts, IO, tax,
trade, household
survey)
Adjustments to yield
benchmark
(micro consistent) data set
Model Structure
Functional forms
Calibration check
Parameters and
Elasticities
Replication
check
Policy change
(tax) specified
Compute New
Equilibrium
Compare to
benchmark Equilibrium
data
Steps for Implementation of a General Equilibrium Model
37
Merrlees’ (1971) Theory of Optimal Taxation
• Society has distribution of highly skilled people and nonskilled people
• There is an incentive compatible allocation in which highly
productive people earn more and pay higher taxes
• Highly productive individuals have material incentive to
work hard even though their net of tax income may not be
proportional to their labour
• Incentive compatible consumption maximise the social
welfare and tax system can be designed to obtain this
38
Fiscal Policy Affects Growth Rates of Output
Growth Rates in the UK, USA and Euro Area
5.0
4.0
3.0
2.0
1.0
United Kingdom
United States
Euro area
0.0
1979- 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
89
-1.0
-2.0
39
Ratio of General Government Expenditure to GDP
60.0
Percent of GDP
50.0
40.0
30.0
United Kingdom
United States
Euro area
20.0
10.0
0.0
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
40
General Governmental Tax and Non-tax Receipt
50.0
45.0
40.0
Ratio to GDP
35.0
30.0
25.0
20.0
United Kingdom
United States
Euro area
Total OECD
15.0
10.0
5.0
0.0
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
41
Government Budget Deficit or Surplus
6.0
4.0
Percent of GDP
2.0
0.0
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
-2.0
-4.0
-6.0
-8.0
United Kingdom
United States
Euro area
-10.0
42
Composition of the Public Revenue in the UK
250,000
200,000
150,000
Billions of £
IR+VED+NICS
VAT
Other C&E
100,000
50,000
1994/95
1995/96
1996/97
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
2003/04 p
43
National Debt
Borrowing = Spending - Revenue
Debt = Borrowing +Net Debt Stock
How much a government can finance from Inflationary taxes?
44
Ratio of National Debt to GDP in Advance Countries
125
Canada
France
60
100
40
75
1980
70
60
50
40
1985
1990
1995
2000
2005
1980
125
Germany
1985
1990
1995
2000
2005
1985
1990
1995
2000
2005
1990
1995
2000
2005
Italy
100
75
1980
1985
1990
1995
2000
2005
Japan
150
1985
United Kingdom
50
45
40
35
100
1980
1980
1990
1995
2000
2005
1990
1995
2000
2005
1980
1985
United States
70
60
50
1980
1985
45
Source: IMF
Reasons for Public Debt
• No debt if the budget is balanced every time: G - T= 0
Î ΔB =0
• Debt (B) accumulates when G > T.
• Change in debt has two components
Primary deficit (ΔB = G -T)
Debt servicing rB
ΔB = (G -T) + r B
(1)
46
Debt and Primary Surplus
In terms of GDP
ΔB (G − T ) rB
+
=
Y
Y
Y
(2)
If the primary budget is balanced G - T = 0
Then the debt increases by the rate of interest:
ΔB
=r
B
(3)
A primary surplus is required to pay the interest if debt is to remain
constant
ΔB = 0 => (T − G ) = rB
(4)
47
Debt Dynamics: Determinants of Debt/GDP Ratio
B
⎛ B ⎞ G −T
(5)
+ (r − g )
Δ⎜ ⎟ =
Y
Y
⎝Y ⎠
• Higher the interest rate causes a rise in B/Y
• Lower the growth rate of output causes a rise in B/Y
• Higher the current deficit (G -T) leads to higher B/Y
• Higher initial B/Y implies higher B/Y in subsequent years
Example
Debt ratio = 100% r = 3% g = 2%
T-G = 1% is required to keep B/Y constant
48
Inflation Tax: Seigniorage
Revenue
From the R*
Inflation tax
Ξ*
Inflation rate
49
Inflationary Finance of Public Budget Deficit
B ΔM
⎛ B ⎞ G −T
Δ⎜ ⎟ =
+ (i − π − g ) −
Y PY
Y
⎝Y ⎠
• Higher the interest rate causes a rise in B/Y
• Higher inflation rate lowers the debt/GDP ratio
• Lower the growth rate of output causes a rise in B/Y
• Higher the current deficit (G -T) leads to higher B/Y
• Higher initial B/Y implies higher B/Y in subsequent years
• Higher growth rate of money supply lowers the debt/gdp ratio.
Example
Debt ratio = 100% i = 5% g = 2% π =2%
G-T = 4% then money supply should increase by 3% to keep B/Y
constant
50
Inflationary Finance of Public Budget Deficit
PB
Δ (PB ) ΔM PG PT
=
−
+i
+
PY
PY
PY PY
PY
B ΔM
⎛ B⎞ G −T
Δ⎜ ⎟ =
+ (i − π − g ) −
Y PY
Y
⎝Y ⎠
G −T
B ΔM
⎛ B⎞
Δ⎜ ⎟ = 0 =
+ (i − π − g ) −
Y
Y PY
⎝Y ⎠
B
T − G ΔM
+
= (i − π − g )
Y
Y
PY
51
Seigniorage (Inflation Tax) : A Numerical Example
Seigniorage
π
Si
40
1000
0
0
30
905
0.01
9.05
819
0.02
16.38
607
0.05
30.35
368
0.1
36.8
135
0.2
27
82
0.25
20.5
7
0.5
3.5
20
10
5
0.
25
2
0.
Inflation
0.
1
0.
05
0.
02
0.
01
0
0
0.
Seigniorage revenue
M/P
52
Ricardian Equivalence Theorem: Questions
• Should government finance public budget deficit by borrowing
or by raising taxes?
• is it possible to cut tax rates without a cut in public spending?
• David Ricardo. British economist, who wrote about 180 years
ago that it is not.
• Ricardian Equivalence Theorem states that borrowing more
from private sector or taxing more have equivalent outcome.
53
Basic Proposition of the Ricardian Equivalence
Tax or Borrowing Does not Make Any Difference
Tomorrow C2
Before Borrowing
Budget Constraint
After borrowing
budget constraint
C1 +
C1 +
C2
=
1+ r
(w 1 ) +
⎛ w2 ⎞
⎜
⎟
⎝1+ r ⎠
τ ⎞
C2
⎛ w
= (w1 − τ 1 ) + ⎜ 2 − 2 ⎟
1+ r
⎝1+ r 1+ r ⎠
C1
Today
54
Ricardian Equivalence: Main Proposition
• It does not matter whether public deficit is financed by raising
tax rates or by borrowing from the private sector.
• More Borrowing now means higher rates of tax in the future
for repayment of debt.
• With higher amount of public debt now private households
save more in anticipation of higher taxes in the future that
government will impose on them to repay the debt.
• Private households optimise intertemporally and completely
internalise public policy.
• Borrowing now or raising tax now are equivalent strategies if
both the government and household honour their own inter
temporal budget constraints.
55
Fiscal and Monetary Policy Game in a Diagram
M
(Nardhaus (1994) Model)
Budget
Surplus, S
+
Monetary Bliss (MB)
F
0
Interest rate, r
Budget
Deficit,
D
Nash equilibrium (N)
Fiscal Bliss (FB)
M
F
56
Inflation-Unemployment Game Between Private and Public Sectors: Normal form
Government chooses actual inflation and private sector makes expectation about it.
H strategy corresponds to high inflation expectation by the private sector
L strategy corresponds to low inflation expectation by the private sector
...............................
Pr ivate Sector
⎡
Government Sector ⎢⎢ H
⎢⎣ L
H
(4,4)
(3,6)
L ⎤
(6,3)⎥⎥
(5,5)⎥⎦
First element represents payoff to the row-player (Government).
Second element represents Payoff to the column-player (private sector).
57
Process of Finding a Nash Equilibrium
Private sector
H
4
4
Government
L
3
6
6
3
5
5
H
Government Sector’ choice
L
Private sector
4
H
Government
H
4
L
Private Sector’ choice
L
6
3
5
H
4
H
L
3
6
3
5
L
4
6
6
5
3
5
Outcome of the Game
58
Nash solution is not Pareto optimal. (L,L) =(5,5) would have been better for both.
Inflation-Unemployment Game Between Private and Public Sectors in a diagram
π t = π e , H − b(ut − u n )
πt −π
e
t
C(6,3)
D(4,4)
(govt, private)
(High, high)
(high, low)
π t = π e , L − b(ut − u n )
(low, high)
B(3,6)
A(5,5)
(low, low)
0
ut = u n
PC2
ut − u n
PC1
59
Inflation-Unemployment Game Between Private and Public Sectors
π t = π e , H − b(ut − u n )
Nash Equilibrium
πt −π
e
t
C(6,3)
D(4,4)
Hated by
the government
Preferred by
government
π t = π e , L − b(ut − u n )
B(3,6)
A(5,5)
PC2
0
Cooperative solution
Pareto solution
ut = u n
ut − u n
PC1
60
Extensive Form of Inflation-Unemployment Game: When government moves first
H
H
(4,4)
Private
Sector
L
(6,3)
(3,6)
Government
H
L
Private
Sector
L
(5,5)
61
Dynamic Inflation-Unemployment Game: Solution by Backward Induction
H
H
(4,4)
Private
Sector,
T2
L
(6,3)
(3,6)
Government,
T1
H
L
Private
Sector,
T2
L
(5,5)
62
Credibility Problem, Cheating and Discount Factor of the Game
Both gain by playing (C,C)
But this solution is not credible.
There is incentive to deviate. Trigger Strategy
Game returns to Nash path in absence of credibility.
If the game is played infinite number of times the optimal discount value
ff the game is calculated as
5
PV (C , C ) = 5 + 5δ + 5δ + 5δ + ... + 5δ =
1− δ
2
3
n
PV (C , C ) = 5 + 5δ + 5δ 2 + 5δ 3 + ... + 5δ n =
Lim n →∞
5
1− δ
PV (cheat ) = 6 + 4δ + 4δ 2 + 4δ 3 + ... + 4δ n
63
Solution for the Discount Factor of the Game
PV ( L, L) = 5 + 5δ + 5δ 2 + 5δ 3 + ... + 5δ n =
Lim
n →∞
5
1−δ
PV (cheat ) = 6 + 4δ + 4δ 2 + 4δ 3 + ... + 4δ n
δPV (cheat ) = 6δ + 4δ 2 + 4δ 3 + ... + 4δ n +1
(1 − δ )PV (cheat) = 6 − 6δ + 4δ
PV (cheat ) = 6 + 4
lim n →∞
δ
(1 − δ )
δ
5
= 6+ 4
(1 − δ )
1−δ
5 = 6(1 − δ ) + 4δ
δ n +1 ≈ 0
6 − 5 = 2δ
1
δ =
2
64
References
•
•
•
•
http://www.statistics.gov.uk/themes/economy/default.asp
http://www.ifs.org.uk/publications.php;
http://www.ifs.org.uk/public/bn20.pdf
http://www.statistics.gov.uk/themes/economy/Articles/NationalAccounts/dow
nloads/1995_UK_Analytical_Input_Output_Tables_article.pdf; www.hmtreasury.gov.uk/Economic Data and Tools
•
•
•
Barro, R. J. (19740, "Are Government Bonds Net Wealth?," Journal of Political
Economy pp. 1095-1117.
Bhattarai K. (2002) Welfare Impacts of Equal-yield Tax Reforms in the UK Economy, mimio, University of Hull.
Hutton, J. P.; A. Ruocco (1999) Tax Reform and Employment in Europe International Tax and Public Finance,
August, 6:3:263-87.
Clark Tom , M Elsby and S Love (2001) Twenty Five Years of Falling Investment? Trends in Capital Spending on
Public Services, Institute of Fiscal Studies.
Mirlees, J.A. (1971) “An exploration in the theory of optimum income taxation”, Review of Economic Studies,
38:175-208.
•
•
•
Pigou A.C. (1947) A Study in Public Finance (3rd edition) McMillan, London.
•
Chote, Emmerson and Harrison and Miles (2006) The IFS Green Budget: January, Institute of Fiscal Studies,
Commentary 87, 7 Ridgemount Street, London WC1E 7AE.
Emmerson C. and C Frayne (2002) Challenges for the July Spending Review,
http://www.ifs.org.uk/budgetindex.shtml; http://www.ifs.org.uk/public/bn20.pdf.
HM Treasury (2002) Reforming Britain’s Economic and Financial Policy, Palgrave.
Institute for Fiscal Studies (2002), The IFS Green Budget, Janaury.
Shoven, J.B. and J. Whalley (1984) “Applied General-Equilibrium Models of Taxation and International Trade: An
Introduction and Survey,” Journal of Economic Literature 22, 1007-1051
Whalley J. (1975) “A General Equilibrium Assessment of the 1973 United Kingdom tax reform”, Economica,
42:166:139-161.
Ramsey, F. P. (1927) “A contribution to the theory of taxation”, Economic Journal, 37:47-61.
•
•
•
•
•
•
65