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:	Sopraseuth, Thepthida Langot, Francois Patureau, Lise
Format:	Paper
Language:	English
Place of publication:	01.04.2012
Related:	CEPREMAP
Data of publication:	2012/04
Series:	CEPREMAP Working Papers (Docweb)
Subjects:	fiscal devaluation; consumption tax; payroll tax; labor market search; small open economy; Dynamic General Equilibrium model
Online Access:	available in Bonn?
Database:	RePEc RePEc IDEAS Database information Databases - DBIS