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Employment Flows, Capital Mobility, and Policy Analysis[Note 2. Manuscript received May 1998; revised November 1999. ...]
Author(s) -
Veracierto Marcelo
Publication year - 2001
Publication title -
international economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.658
H-Index - 86
eISSN - 1468-2354
pISSN - 0020-6598
DOI - 10.1111/1468-2354.00125
Subject(s) - capital (architecture) , economics , welfare , capital formation , macroeconomics , microeconomics , financial capital , market economy , history , profit (economics) , archaeology
This article extends Hopenhayn and Rogerson's analysis of firing taxes by introducing a flexible form of capital and considering transitionary dynamics. The article finds that capital is not important for understanding the long run and welfare effects of firing taxes. However, capital is crucial for determining the short run consequences of eliminating this type of policy.