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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
International Finance Discussion Papers: How Do Laffer Curves Differ Across Countries

International Finance Discussion Papers: How Do Laffer Curves Differ Across Countries

Trabandt, Mathias
Uhlig, Harald
United States Federal Reserve Board

Paperback

General Political Science

ISBN10: 1288723695
ISBN13: 9781288723690
Publisher: Bibliogov
Published: Feb 6 2013
Pages: 52
Weight: 0.24
Height: 0.11 Width: 7.44 Depth: 9.69
Language: English
We seek to understand how Laffer curves differ across countries in the US and the EU-14, thereby providing insights into fiscal limits for government spending and the service of sovereign debt. As an application, we analyze the consequences for the permanent sustainability of current debt levels, when interest rates are permanently increased e.g. due to default fears. We build on the analysis in Trabandt and Uhlig (2011) and extend it in several ways. To obtain a better fit to the data, we allow for monopolistic competition as well as partial taxation of pure profit income. We update the sample to 2010, thereby including recent increases in government spending and their fiscal consequences. We provide new tax rate data. We conduct an analysis for the pessimistic case that the recent fiscal shifts are permanent. We include a cross-country analysis on consumption taxes as well as a more detailed investigation of the inclusion of human capital considerations for labor taxation.

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