International Spillovers of Taxation

Frenkel, Jacob A.; Razin, Assaf; Symansky, Steven

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International Spillovers of Taxation

IMF Working Paper No. 89/43

64 Pages Posted: 15 Feb 2006

See all articles by Jacob A. Frenkel

Jacob A. Frenkel

Merrill Lynch & Co. - Sovereign Advisory Group and Global Financial Institutions Group; National Bureau of Economic Research (NBER)

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Steven Symansky

International Monetary Fund (IMF) - Fiscal Affairs Department

There are 2 versions of this paper

Date Written: May 11, 1989

Abstract

This paper highlights key issues pertinent for the understanding of international effects of domestic tax policies and of international tax harmonization. The analytical framework adopts the saving-investment balance approach to the analysis of international economic interdependence focusing on income, consumption, and international borrowing. A simulation model is developed that is richer in structure than the two period analytical model. The analytical and simulation frameworks are used to analyze the consequences of revenue-neutral conversions between income and consumption (VAT) tax systems, the international effects of budget deficits and public-debt management, and the effects of international tax harmonization. We demonstrate that the effects of such changes in the structure of taxes depend critically on international differences in saving and investment propensities.

JEL Classification: 430, 320

Suggested Citation: Suggested Citation

Frenkel, Jacob A. and Razin, Assaf and Symansky, Steven, International Spillovers of Taxation (May 11, 1989). IMF Working Paper No. 89/43, Available at SSRN: https://ssrn.com/abstract=884777