Industrial dynamics and the neolclassical growth model.
Allocating Government Education Expenditures across K-12 and College Education.
Labor Market Trends with
Balanced Growth.
Tax Reform with Useful Public Expenditures.
The Transition from Dirty to Clean Industries: Optimal Fiscal Policy in
a Two-Sector Model of Endogenous Growth.
Growth Effects of Shifting from a Graduated- Rate Tax System to a Flat Tax.
Fiscal Policy and Productivity Growth in the OECD.
Uniform Two-Part Tariffs and Below Marginal Cost Prices: Disneyland Revisited.
Optimal Fiscal Policy, Public Capital, and the Productivity Slowdown.
On Public Capital Analysis with State Data.
The Link Between Tax Rates and Foreign Direct Investment.
Welfare, Stabilization or Growth: A Comparison of Different Fiscal Objectives.
Equivalence of the Standard and Modified Switching Regression Models.
A Normative Analysis of Public Capital.
Optimal Tax Rules in a Dynamic Stochastic Economy with Capital.
A Diagnostic Test Without Numerical Integration.
Backward Solving Quarterly Models with Seasonal or Annual Shocks.
Health Plan Choice and the Utilization of Health Care Services.
The Demand for Employment-Based Health Insurance Plans.
Employment Based Health Insurance.
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Abstract: We compute the growth effects of adopting a revenue-neutral flat tax for both a human capital-based endogenous growth model and a standard neoclassical growth model. Long-run growth effects are decomposed into the parts attributable to the flattening of the marginal tax schedule, the full expensing of physical-capital investment, and the elimination of double taxation of business income. The most important element of the reform is the flattening of the marginal tax schedule. Without this element, the combined effects of the other parts of the reform can actually reduce long-run growth. In the years immediately following the reform, the transition dynamics implied by the neoclassical growth model are quite similar to that of the endogenous growth model.
