Citation

Discussion Paper Details

Please find the details for DP760 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Convergence in Growth Rates: The Role of Capital Mobility and International Taxation

Author(s): Assaf Razin and Chi-Wa Yuen

Publication Date: January 1993

Keyword(s): Capital Mobility, Economic Growth, Human Capital Accumulation, International Taxation and Population Growth

Programme Area(s): International Macroeconomics

Abstract: We consider the role of capital mobility and international taxation in explaining the observed diversity in long-term income growth rates. Under perfect capital mobility, international differences in taxes will not matter for total growth differentials. Policy differences have a role to play in per capita growth differentials, however, when they lead to a divergence in the after-tax rates of return on capital across countries, as when the residence principle is adopted universally. When this is the case, how tax differences affect the growth rates of population and human capital will depend on the relative preference of the individual household towards these two engines of growth. Optimal tax policies are found to be growth-equalizing with and without policy coordination.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=760

Bibliographic Reference

Razin, A and Yuen, C. 1993. 'Convergence in Growth Rates: The Role of Capital Mobility and International Taxation'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=760