Dynamic optimal taxation in small open economies

Isabel H. Correia

doi:10.1016/0165-1889(95)00871-3

Dynamic optimal taxation in small open economies

Isabel H. Correia^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

17 Citations (Scopus)

Abstract

This paper examines the effects of perfect capital mobility on the determination of optimal capital taxation. It shows that capital movements do not change dramatically the optimal tax path studied for the closed economy. In addition, the paper provides a counterexample to the standard belief that the worldwide system is the optimal regime of taxation. Finally it shows that the rate of taxation of the rest of the world is not fundamental to determine the optimal decision of a small economy.

Original language	English
Pages (from-to)	691-708
Number of pages	18
Journal	Journal of Economic Dynamics and Control
Volume	20
Issue number	4
DOIs	https://doi.org/10.1016/0165-1889(95)00871-3
Publication status	Published - Apr 1996

Keywords

Capital mobility
Optimal capital taxation
Optimal regime of capital taxation

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10.1016/0165-1889(95)00871-3

Cite this

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KW - Optimal regime of capital taxation

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Dynamic optimal taxation in small open economies

Abstract

Keywords

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