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Author:Cassou, Steven P. 

Working Paper
Optimal fiscal policy, public capital, and the productivity slowdown

A presentation of a quantitative-theoretical model that can account for much of the behavior of the stock of public capital in the U.S. economy over the last 70 years, with an application to examining some possible causes of the slowdown in the growth of U.S. labor productivity.
Working Papers (Old Series) , Paper 9509

Working Paper
Growth effects of shifting from a progressive tax system to a flat tax

This paper develops a quantitative general equilibrium model to assess the growth effects of adopting a flat tax plan similar to the one proposed by Hall and Rabushka (1995). Using parameters calibrated to match the progressivity of the U.S. tax schedule and other features of the U.S. economy, we compute the growth and level effects of adopting a revenue-neutral flat tax for both a human-capital based endogenous growth model and a standard neoclassical growth model. Growth effects are decomposed into the parts attributable to the flattening of the marginal tax schedule, the full expensing of ...
Working Paper Series , Paper 2000-15

Working Paper
Growth effects of a flat tax.

A presentation of a quantitative general equilibrium model showing that a revenue-neutral flat tax can permanently boost per capita growth by 0.18 to 0.85 percentage point annually, and that the lower marginal tax rate and the full investment write-off are both important contributors to the increased growth.
Working Papers (Old Series) , Paper 9615

Working Paper
Welfare, stabilization, or growth: a comparison of different fiscal objectives

An argument that stabilization produces welfare levels nearly identical to those of welfare maximation, and that both these policies yield large welfare gains and modest growth losses relative to growth maximization policies.
Working Papers (Old Series) , Paper 9614

Working Paper
Fiscal policy and productivity growth in the OECD

We use a simple endogenous growth model with productive public capital to investigate the degree to which observed fiscal policies in eight OECD countries can account for slowdowns in the growth rates of aggregate labor productivity since 1970. In model simulations, we find that none of the observed public capital policies can generate slowdowns of sufficient magnitude to match those in the data. For most countries in our sample, a simulation that combines the observed public capital policy with the observed tax policy does a better job of accounting for the slowdown than either policy in ...
Working Papers in Applied Economic Theory , Paper 99-02

Working Paper
Tax reform with useful public expenditures

This paper examines the economic effects of tax reform in an endogenous growth model that allows for two types of useful public expenditures; one type contributes to human capital information while the other provides direct utility to households. We show that the optimal fiscal policy calls for full expensing of private investment which shifts the tax base to private consumption. The efficient levels of public investment and public consumption relative to output are uniquely pinned down by parameters that govern both technology and preferences. In general, implementing the optimal fiscal ...
Working Papers in Applied Economic Theory , Paper 98-09


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