Factor income taxation and growth under asymmetric information

• 成果类型: Article
• 署名作者: Ho, Wai-Hong; Wang, Yong
• 署名单位: City University of Hong Kong; University of Macau
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2006.08.002
• 发表日期: 2007
• 页码: 775-789
• 关键词: factor income taxation; GROWTH; asymmetric information

摘要

This paper studies the growth effects of factor income taxation on capital and labor in an endogenous growth model with overlapping generations. Capital accumulation in our model takes place through credit-financed investments in a market with asymmetric information between lenders and borrowers. We show that, in the presence of asymmetric information, capital income taxation worsens the adverse selection problem in the credit market, which in turn introduces an additional adverse effect on growth. In so doing, our analysis provides a new argument in favor of a lower (higher) capital (labor) income taxation in funding public expenditures. (c) 2006 Elsevier B.V. All rights reserved.