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...
|Place of publication:||
Institute for the Study of Labor (IZA)
|Data of publication:||2012/06|
IZA Discussion Papers
|Online Access:||available in Bonn?|
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