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Redistributive Taxation in a Small Open Economy

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  • Cem Karayalcin

Abstract

This paper studies the effects of redistributing the tax burden across households on the current account. The set-up is a dynamic small open economy with infinitely lived households that have perfect foresight. It is shown that the different speeds at which households adjust consumption levels to their long-run values may cause nonmonotonic transient paths.

Suggested Citation

  • Cem Karayalcin, 1996. "Redistributive Taxation in a Small Open Economy," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 688-698, August.
    • Handle: RePEc:cje:issued:v:29:y:1996:i:3:p:688-98
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