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Federalismo fiscal en Argentina: Un análisis de efectos spillover mediante un CGE regional
[Fiscal Federalism in Argentina: An analysis of spillover effects using a regional CGE]

Author

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  • Mastronardi, Leonardo Javier

Abstract

The aim of this paper is to analyze the spillover effects of national and local tax policies in Argentina. To this aim, I develop a static bi-regional general equilibrium model for the Buenos Aires City (CABA) and the rest of Argentina. The BAC is relevant for the rest of the country because it represents 7% of the population of the country, but 28% of its GDP and a significant proportion of the remuneration of capital of the whole country is paid to BAC residents. For the construction of the regional SAM I used the methodology developed by Flegg (1997, 2000) and Robinson et al. (2001), and the computable general equililbrium model is presented in MPSGE framework (Rutherford, 1988). I analyze the impact of fiscal policies on welfare of private agents and the spillover effects on the performance of the public sector of both regions using equal-revenue tax increases simulations. As expected, the model shows that regional and national fiscal policies do have relevant effects on the activity level in both regions and on the welfare of their inhabitants. The paper also presents sensitivity analyses, taking into account changes in the level of indexation of wages and in degree of capital mobility. Both parameters are relevant for the quantitative results. The results show that: (i) an increase in local taxes produces negative spillovers on the other region on the welfare of households and in the activity levels –the effect in CABA is more significant; (ii) an increase in national value added tax is significant for CABA indicators since it specialized in the production of services; (iii) the results are stronger under a minimum real wages condition, and; (iv) capital mobility is a key factor to determine the importance of regional negative fiscal spillovers.

Suggested Citation

  • Mastronardi, Leonardo Javier, 2013. "Federalismo fiscal en Argentina: Un análisis de efectos spillover mediante un CGE regional [Fiscal Federalism in Argentina: An analysis of spillover effects using a regional CGE]," MPRA Paper 54376, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:54376
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    References listed on IDEAS

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    6. Chisari, Omar & Ferro, Gustavo & González, Mariano & León, Sonia & Maquieryra, Javier & Mastronardi, Leonardo & Roitman, Mauricio & Romero, Carlos & Theller, Ricardo, 2010. "Modelo de Equilibrio General Computado para la Argentina 2006," UADE Textos de Discusión 63_2010, Instituto de Economía, Universidad Argentina de la Empresa.
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    More about this item

    Keywords

    Fiscal Federalism Computable General Equilibrium Regional Economics;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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