This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Investment Tax Credit in an Open Economy

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Partha Sen
Stephen J. Turnovsky

Additional information is available for the following registered author(s):

Abstract

This paper contrasts the effects of a permanent and temporary investment tax credit in an open economy. In both cases an ITC will initially stimulate investment, while reducing employment and output, and generating a current account deficit. If the ITC is permanent, the accumulation of capital leads to a higher equilibrium capital stock, higher employment and output, and a reduction in the economy's stock of net credit. If the ITC is temporary, after its removal, the economy eventually moves to a new steady-state equilibrium having a lower permanent capital stock and employment, together with a higher stock of net credit.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.nber.org/papers/w3298.pdf
File Format: application/pdf
File Function:
Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3298.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Feb 1991
Date of revision:
Handle: RePEc:nbr:nberwo:3298

Note: ITI IFM
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords:

Other versions of this item:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Willem H. Buiter, 1987. "Fiscal policy in open, interdependent economies," NBER Working Papers 1429, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Francesco Giavazzi & Wyplosz, . "The Real Exchange Rate, the Current Account and the Speed of Adjustment," Rodney L. White Center for Financial Research Working Papers 13-82, Wharton School Rodney L. White Center for Financial Research.
    Other versions:
  3. Obstfeld, Maurice, 1989. "Fiscal deficits and relative prices in a growing world economy," Journal of Monetary Economics, Elsevier, vol. 23(3), pages 461-484, May. [Downloadable!] (restricted)
    Other versions:
  4. Maurice Obstfeld & Alan C. Stockman, 1985. "Exchange-Rate Dynamics," NBER Working Papers 1230, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Buiter, Willem H, 1984. "Policy Evaluation and Design for Continuous Time Linear Rational Expectations Models: Some Recent Developments," CEPR Discussion Papers 15, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Abel, Andrew B., 1982. "Dynamic effects of permanent and temporary tax policies in a q model of investment," Journal of Monetary Economics, Elsevier, vol. 9(3), pages 353-373. [Downloadable!] (restricted)
  7. Andrew B. Abel & Olivier J. Blanchard, 1983. "An Intertemporal Model of Saving and Investment," NBER Working Papers 0885, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  8. Partha Sen & Stephen J. Turnovsky, 1989. "Deterioration of the Terms of Trade and Capital Accumulation: A Reexamination of the Laursen-Metzler Effect," NBER Working Papers 2616, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Marcelo Bianconi, 2003. "Fiscal Policy and the Terms of Trade in an Analytical Two-Country Dynamic Model," Asia-Pacific Financial Markets, Springer, vol. 10(1), pages 25-41, January. [Downloadable!] (restricted)
    Other versions:
  2. Philip L. Brock & Stephen J. Turnovsky, 1993. "The Dependent Economy Model with Both Traded and Non-Traded Capital Goods," NBER Working Papers 4500, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  3. Karine Gente & Miguel Leon-Ledesma, 2004. "Does the World Real Interest Rate Affect the Real Exchange Rate? The South East Asian Experience," Studies in Economics 0405, Department of Economics, University of Kent. [Downloadable!]
    Other versions:
  4. Leon Bettendorf & Ben Heijdra, 2001. "Intergenerational and International Welfare Leakages of a Product Subsidy in a Small Open Economy," International Tax and Public Finance, Springer, vol. 8(5), pages 705-729, November. [Downloadable!] (restricted)
    Other versions:
  5. Patrick K. Asea & Stephen J. Turnovsky, 1997. "Capital Income Taxation and Risk-Taking in a Small Open Economy," NBER Working Papers 6189, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Olivier, CARDI, 2005. "The Zero-Root Property : Permanent vs Temporary Terms of Trade Shocks," Discussion Papers (ECON - Département des Sciences Economiques) 2005030, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
    Other versions:
  7. Olivier, CARDI, 2005. "Another View of the J-Curve," Discussion Papers (ECON - Département des Sciences Economiques) 2005029, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
    Other versions:
  8. Arman Mansoorian & Mohammed Mohsin, 2002. "The Employment, Investment and Current Account Effects of Exchange Rate Policies in a Cash-in-Advance Economy," Working Papers 2002_04, York University, Department of Economics. [Downloadable!]
  9. CARDI, Oliver & BERTINELLI, Luisito, 2004. "A formal model of krugmanÕs intuition on the J-curve," CORE Discussion Papers 2004043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  10. Fisher, Walter H. & Hof, Franz X., 2001. "Status Seeking in the Small Open Economy," Economics Series 106, Institute for Advanced Studies. [Downloadable!]
    Other versions:
  11. Søren Nielsen, 1992. "Capital income taxation in a growing world economy," Journal of Economics, Springer, vol. 55(1), pages 77-99, February. [Downloadable!] (restricted)
  12. Fisher, Walter H., 2002. "Investment and Current Account Dynamics in an Open Economy Status Seeking Framework," Economics Series 110, Institute for Advanced Studies. [Downloadable!]
  13. Yasushi Iwamoto & Akihisa Shibata, 1999. "Foreign Tax Credit and the Current Account," International Tax and Public Finance, Springer, vol. 6(2), pages 131-148, May. [Downloadable!] (restricted)
  14. Javier Coto-Martinez & Huw Dixon, . "Fiscal Policy in an Imperfectly Competitive Dynamic Small Open Economy," Discussion Papers 99/19, Department of Economics, University of York. [Downloadable!]
  15. Creina Day & Garth Day, 2007. "Fiscal Reform, Growth and Current Account Dynamics," ANUCBE School of Economics Working Papers 2007-485, Australian National University, College of Business and Economics, School of Economics. [Downloadable!]
  16. Stephen J. Turnovsky & Marcelo Bianconi, 1993. "The International Transmission of Tax Policies in a Dynamic World Economy," NBER Working Papers 4086, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  17. Fisher, Walter H., 2001. "Current Account Dynamics in a Small Open Economy Model of Status Seeking," Economics Series 107, Institute for Advanced Studies. [Downloadable!]
    Other versions:
  18. Feltenstein, Andrew & Shah, Anwar, 1991. "Tax policy options to promote private capital formation in Pakistan," Policy Research Working Paper Series 698, The World Bank. [Downloadable!]
Statistics
Access and download statistics

Did you know? All bibliographic data on IDEAS has been put in the public domain by the publishers.

This page was last updated on 2009-11-14.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.