Title: | Taxes and the Global Allocation of Capital |
Authors: | Backus, David Henriksen, Espen Storeletten, Kjetil |
Keywords: | capital;taxes;capital-output ratio;international capital °ows |
Issue Date: | 15-Nov-2007 |
Series/Report no.: | EC-07-31 |
Abstract: | Despite enormous growth in international capital °ows, capital-output ratios continue to exhibit substantial heterogeneity across countries. We explore the possibility that taxes, particularly corporate taxes, are a signi¯cant source of this heterogeneity. The evidence is mixed. Tax rates computed from tax revenue are inversely correlated with capital-output ratios, as we might expect. However, effective tax rates constructed from official tax rates show little relation to capital -- or to revenue-based tax measures. The stark difference between these two tax measures remains an open issue. |
URI: | http://hdl.handle.net/2451/26061 |
Appears in Collections: | Economics Working Papers |
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