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Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/26061

Title: Taxes and the Global Allocation of Capital
Authors: Backus, David
Henriksen, Espen
Storeletten, Kjetil
Keywords: capital
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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