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Est‐ce que des réductions d’impôt engendrent des déficits jumeaux? Une analyse de plusieurs pays .
Author(s) -
Boileau Martin,
Normandin Michel
Publication year - 2012
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/j.1540-5982.2012.01748.x
Subject(s) - economics , monetary economics , deficit spending , channel (broadcasting) , open economy , macroeconomics , international economics , exchange rate , computer science , debt , computer network
We study the effects of tax shocks on the budget and external deficits for 16 industrialized countries over the post‐1970 period. Our structural approach is based on a small open economy model where a tax cut affects the external deficit by two distinct channels. The demographic channel works through the overlapping‐generation structure of the model. The forecasting channel works through the dynamic structure of the model. Our empirical analysis documents that tax shocks generate twin deficits, and that both channels play important roles in explaining the positive comovement between the budget and external deficits.