Optimal fiscal devaluation

We study fiscal devaluation in a small-open economy with labor market search frictions. Our analysis shows the key role of both dimensions in shaping the optimal tax scheme. By reducing labor market distortions, the tax reform is welfare-improving. Yet, as it makes imports more expensive, fiscal dev...

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Bibliographic details
Main Author: Langot, François
Patureau, Lise
Sopraseuth, Thepthida
Format: Paper
Language: English
Place of publication: Bonn IZA 2012
Data of publication: 2012
Series: Discussion paper series
Subjects:
Online Access: available in Bonn?
Database: ECONIS
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