Government budget, public-sector wages and capital taxes in a small open economy
Research output: Contribution to conference › Paper › Research
This paper examines the welfare implications of adjustments in public-sector wages and capital tax rates for a small open economy in a general equilibrium setting. The individually and jointly optimal wage and tax policies are derived and interpreted. Facing reductions in land sales and falls in foreign interest rates, a cut in public workers’ pay is needed for making their wage comparable to the private sector and a hike in capital taxes is recommended for a budgetary consideration. Using a computable general equilibrium model for Hong Kong, we numerically evaluate the various optimal policies which not only confirm the theoretical results but also provide quantitative estimates of the optimal policy variables.
Original language | English |
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Publication date | 2005 |
Number of pages | 25 |
Publication status | Published - 2005 |
Event | Annual Conference on Global Economic Analysis - Lübeck, Germany Duration: 9 Jun 2005 → 11 Jun 2005 Conference number: 8 |
Conference
Conference | Annual Conference on Global Economic Analysis |
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Number | 8 |
Country | Germany |
City | Lübeck |
Period | 09/06/2005 → 11/06/2005 |
ID: 7986227