In this paper, we analyze government budget balance within a simple model of endogenous growth. For the AK model, simple analytical conditions for a tax cut to be self-financing can be derived. The critical variable is not the tax rate per se, but the transfer-adjusted tax rate. We discuss some...

We examine how tax avoidance in the form of trade in well-functioning asset markets affects the empirical study of labor supply. We discuss the implications for tax policy analysis, and we show that a failure to account for avoidance responses may lead to huge errors when predicting how tax...

The common view that far-reaching labour market deregulation is the only remedy for high European unemployment is too simplistic. First, the ecidence suggests that deeply rooted social customs are an important cause of wage rigidity, going beyonf the legal constraints emphasized in the political...