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: 01.06.2012
Related: Institute for the Study of Labor (IZA)
Data of publication: 2012/06
Series: IZA Discussion Papers
Subjects:
Online Access: available in Bonn?
Database: RePEc
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