Séminaire KTO-GREDEG-OFCE - Petros Milionis (University of Groningen)

"Is Capital Taxation Always Harmful for Economic Growth?"
Quand ? Le 02-03-2017,
de 10:30 à 12:00
Où ? GREDEG - Salle Picasso
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Séminaire KTO-GREDEG-OFCE - Petros Milionis (University of Groningen)


Title : "Is Capital Taxation Always Harmful for Economic Growth?"


Abstract: We investigate theoretically and empirically the relationship between capital taxation and economic growth. Using a long cross-country panel data set starting in 1965 and employing a variety of econometric techniques, we document that greater reliance on capital taxation is not negatively associated with growth rates. Exploring the heterogeneity of this effect across developed and developing countries we find that this association tends to be positive for the former and negative for the latter. To rationalize these empirical .ndings we propose a multi-country innovation-based growth model where innovations spill over from leading to lagging economies. In the context of this model we document that the standard Chamley-Judd result of zero optimal capital taxation is less applicable to leading economies where growth is driven by domestic innovation and more applicable to lagging economies where growth is driven by implementation of foreign innovations.

 

Joint with  Fabian ten Kate

 

Keywords: Economic Growth, Innovation, Capital Taxation, Tax Structure

JEL Classification: E60, H20, O40.

 

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