Laffer curve changes shape when government debt varies
For labour and capital income taxes, complete-market (CM) and incomplete-market (IM) models deliver similar Laffer curves when transfers are adjusted, with the slippery slope a little bit farther to the right in the IM model, a new Banque de France working paper shows.
The paper, The Laffer curve in an incomplete-market economy by Patrick Fève, Julien Matheron, and Jean-Guillaume Sahuc, investigates the characteristics of the Laffer curve in a neoclassical growth model of the US economy with
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