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Aggregate implications of the tax reform of 2017: Can taxes guide technology?

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  • Moscoso Boedo, Hernan

Abstract

This paper analyzes the effects of the US tax reform of 2017 using a model of endogenous technological adoption. The lower tax levels induce large human capital investments that are augmented by the endogenous transition towards skill biased technologies.

Suggested Citation

  • Moscoso Boedo, Hernan, 2018. "Aggregate implications of the tax reform of 2017: Can taxes guide technology?," Economics Letters, Elsevier, vol. 173(C), pages 6-9.
    • Handle: RePEc:eee:ecolet:v:173:y:2018:i:c:p:6-9
    DOI: 10.1016/j.econlet.2018.09.009
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    References listed on IDEAS

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    1. Rodolfo E. Manuelli & Ananth Seshadri, 2014. "Human Capital and the Wealth of Nations," American Economic Review, American Economic Association, vol. 104(9), pages 2736-2762, September.
    2. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
    3. Moscoso Boedo, Hernan J., 2010. "Optimal technology and development," Journal of Macroeconomics, Elsevier, vol. 32(2), pages 617-634, June.
    4. Lee, Jong-Wha & Lee, Hanol, 2016. "Human capital in the long run," Journal of Development Economics, Elsevier, vol. 122(C), pages 147-169.
    5. repec:bin:bpeajo:v:49:y:2019:i:2018-01:p:257-345 is not listed on IDEAS
    6. Claudio E. Montenegro & Harry Anthony Patrinos, 2014. "Comparable Estimates of Returns to Schooling Around the World," Working Papers wp390, University of Chile, Department of Economics.
    7. Funk, Peter & Vogel, Thorsten, 2004. "Endogenous skill bias," Journal of Economic Dynamics and Control, Elsevier, vol. 28(11), pages 2155-2193, October.
    8. Robert J. Barro & Jason Furman, 2018. "Macroeconomic Effects of the 2017 Tax Reform," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 49(1 (Spring), pages 257-345.
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    Cited by:

    1. Chang, Kai & Long, Yu & Yang, Jiahui & Zhang, Huijia & Xue, Chenqi & Liu, Jianing, 2022. "Effects of subsidy and tax rebate policies on green firm research and development efficiency in China," Energy, Elsevier, vol. 258(C).
    2. Saeed Solaymani, 2020. "Assessing the economic and social impacts of fiscal policies," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 47(3), pages 671-694, March.

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    More about this item

    Keywords

    Endogenous skill biased technical change; Tax policy;

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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