Capros P., P. Karadeloglou and G.N. Mentzas (1990) "Tax Reform within the EEC Internal Market"
Paper presented at the 5th Annual Congress of the European Economic Association, August-September, Lisboa, Portugal.
The aim of this paper is the empirical analysis of the tax reform, which occurs with the completion of the Internal Market with two alternative macroeconomic modelling approaches. For that purpose we design, build and estimate a neo-Keynesian and general equilibrium model with endogenous production price and wage rate and exogenous exchange rate. The policy questions examined concerns the reduction in the rate of import duties, export subsidies and indirect taxes. Empirical analysis of the above issues is carried out by comparing the behaviour of both the different modelling approaches and the alternative ways of price and wage determination in the context of a general equilibrium model. The alternative variants try to represent in a formal manner the rigidities and imperfections in the markets and evaluate their policy impacts. The impacts of tax policy modifications are evaluated with and without public budget constraint and alternative ways of financing it.
Paper available on request (hard copy only).
