The authors use an endogenous growth dynamic general-equilibrium model, which accommodates the institutional constraints of the Stability and Growth Pact, to study tax reform in Portugal. Simulation results suggest that tax cuts financed in a nondistortionary way increase long-term GDP; i.e.,...

In this paper we analyze a tax reform package recently proposed in Cavaco Silva (1999). We do so in the context of a dynamic general-equilibrium model of the Portuguese economy and we focus on the efficiency, welfare, and tax revenue effects of this package. Simulation results suggest that the...

At the epicenter of the international financial crisis is a debt crisis where low-quality assets and the slowdown in economic activity have made creditors worldwide wary of the ability and willingness of debtors to comply with their obligations. In this context of indebtedness, now perceived as...

We use a dynamic general equilibrium model to quantify the likely long-term impact of a fiscal devaluation on the Portuguese economy. In a context of exogenous growth, and imposing an unchanged budget deficit to GDP ratio in the year the policy is enacted, we find that a tax swap worth 1 percent...

With population aging fiscal budgets in the European Union will come under significant strain. To tackle this problem, the Stockholm Agenda prescribes increasing employment rates, accelerating fiscal consolidation, and furthering entitlement reform. Using a generational accounting model with a...

This article explores the capacity for environmental fiscal reform to reduce carbon dioxide (CO2) emissions, stimulate economic performance, and promote fiscal sustainability. Simulation results suggest that reforms based on CO2 taxation stimulate gross domestic product (GDP) when tax revenues...

The objective of this paper is to examine the degree of persistence in final energy demand in Portugal. Our results suggest that when structural breaks are accounted for, aggregate energy demand and all of its components are stationary. Accordingly, the response to shocks is not permanent. We...