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Input versus Output Taxation in an Experimental International Economy

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dc.creator Riedl, Arno
dc.creator van Winden, Frans
dc.date 2004
dc.date.accessioned 2013-10-16T07:11:27Z
dc.date.available 2013-10-16T07:11:27Z
dc.date.issued 2013-10-16
dc.identifier http://hdl.handle.net/10419/20614
dc.identifier ppn:474247651
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/20614
dc.description This paper is concerned with a policy oriented macroeconomic experiment involving an 'international' economy with a relatively small 'home' country and a large 'foreign' country. It compares the economic performance of two alternative tax systems as a means to finance unemployment benefits: a sales-tax-cum-labor-subsidy system versus a wage tax system. The two systems are applied to the home country, while the wage tax system always obtains in the foreign country. In stark contrast with expectations of experts the sales tax system clearly outperforms the wage tax system, using standard economic indicators. It is argued that producers' reluctance to incur costs up-front while being uncertain about product prices can explain this outcome. Several pieces of evidence are provided to support this claim. The results strongly suggest that behavioral aspects have to be taken into account also in applied macroeconomic models.
dc.language eng
dc.relation IZA Discussion paper series 1344
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject A10
dc.subject E62
dc.subject D80
dc.subject H20
dc.subject D21
dc.subject C91
dc.subject C90
dc.subject ddc:330
dc.subject laboratory experiment
dc.subject wage tax
dc.subject sales tax
dc.subject macroeconomic policy
dc.subject behavioral economics
dc.subject Lohnsteuer
dc.subject Umsatzsteuer
dc.subject Arbeitslosenversicherung
dc.subject Steuerwettbewerb
dc.subject Zwei-Länder-Modell
dc.subject Theorie
dc.title Input versus Output Taxation in an Experimental International Economy
dc.type doc-type:workingPaper

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