Dynamic Scoring Through Creative Destruction

P. van Oudheusden

Research output: Working paperDiscussion paperOther research output

226 Downloads (Pure)

Abstract

Abstract: We examine the dynamic feedback effects of fiscal policies on the government budget and economy activity in a calibrated general equilibrium framework featuring endogenous growth through creative destruction. For several European countries, we find that making tax incentives with respect to research effort more generous is the least costly way, in terms of the impact on the government budget, to promote economic growth. It is almost three times as cost effective as lowering the tax rate on capital income. When non-distorting financing options are excluded, adjusting the consumption tax to finance more generous tax incentives for research effort leads to the smallest loss in economic efficiency and the largest welfare gain.
Original languageEnglish
Place of PublicationTilburg
PublisherEconomics
Number of pages60
Volume2012-084
Publication statusPublished - 2012

Publication series

NameCentER Discussion Paper
Volume2012-084

Fingerprint

Tax incentives
Creative destruction
Scoring
Government budget
Finance
Endogenous growth
General equilibrium
Tax rate
Financing
Consumption tax
Feedback effect
Income
Economic efficiency
Economic growth
Welfare gains
European countries
Fiscal policy

Keywords

  • Dynamic Scoring
  • Creative Destruction
  • Endogenous Growth
  • Calibration
  • Taxation

Cite this

van Oudheusden, P. (2012). Dynamic Scoring Through Creative Destruction. (CentER Discussion Paper; Vol. 2012-084). Tilburg: Economics.
van Oudheusden, P. / Dynamic Scoring Through Creative Destruction. Tilburg : Economics, 2012. (CentER Discussion Paper).
@techreport{139557152cbb443ba0999897cd82c821,
title = "Dynamic Scoring Through Creative Destruction",
abstract = "Abstract: We examine the dynamic feedback effects of fiscal policies on the government budget and economy activity in a calibrated general equilibrium framework featuring endogenous growth through creative destruction. For several European countries, we find that making tax incentives with respect to research effort more generous is the least costly way, in terms of the impact on the government budget, to promote economic growth. It is almost three times as cost effective as lowering the tax rate on capital income. When non-distorting financing options are excluded, adjusting the consumption tax to finance more generous tax incentives for research effort leads to the smallest loss in economic efficiency and the largest welfare gain.",
keywords = "Dynamic Scoring, Creative Destruction, Endogenous Growth, Calibration, Taxation",
author = "{van Oudheusden}, P.",
note = "Pagination: 60",
year = "2012",
language = "English",
volume = "2012-084",
series = "CentER Discussion Paper",
publisher = "Economics",
type = "WorkingPaper",
institution = "Economics",

}

van Oudheusden, P 2012 'Dynamic Scoring Through Creative Destruction' CentER Discussion Paper, vol. 2012-084, Economics, Tilburg.

Dynamic Scoring Through Creative Destruction. / van Oudheusden, P.

Tilburg : Economics, 2012. (CentER Discussion Paper; Vol. 2012-084).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Dynamic Scoring Through Creative Destruction

AU - van Oudheusden, P.

N1 - Pagination: 60

PY - 2012

Y1 - 2012

N2 - Abstract: We examine the dynamic feedback effects of fiscal policies on the government budget and economy activity in a calibrated general equilibrium framework featuring endogenous growth through creative destruction. For several European countries, we find that making tax incentives with respect to research effort more generous is the least costly way, in terms of the impact on the government budget, to promote economic growth. It is almost three times as cost effective as lowering the tax rate on capital income. When non-distorting financing options are excluded, adjusting the consumption tax to finance more generous tax incentives for research effort leads to the smallest loss in economic efficiency and the largest welfare gain.

AB - Abstract: We examine the dynamic feedback effects of fiscal policies on the government budget and economy activity in a calibrated general equilibrium framework featuring endogenous growth through creative destruction. For several European countries, we find that making tax incentives with respect to research effort more generous is the least costly way, in terms of the impact on the government budget, to promote economic growth. It is almost three times as cost effective as lowering the tax rate on capital income. When non-distorting financing options are excluded, adjusting the consumption tax to finance more generous tax incentives for research effort leads to the smallest loss in economic efficiency and the largest welfare gain.

KW - Dynamic Scoring

KW - Creative Destruction

KW - Endogenous Growth

KW - Calibration

KW - Taxation

M3 - Discussion paper

VL - 2012-084

T3 - CentER Discussion Paper

BT - Dynamic Scoring Through Creative Destruction

PB - Economics

CY - Tilburg

ER -

van Oudheusden P. Dynamic Scoring Through Creative Destruction. Tilburg: Economics. 2012. (CentER Discussion Paper).