Versión de HTML Básico
Carlos Gustavo Machicado y Paúl Estrada
Analíti a
k
4
Revista de Análisis Estadístico
Journal of Statistical Analysis
the reciprocal of the exchange rate (
p
n
), government lump
sum transfers as a share of output (
Γ
, as a proxy for ad-
ditional pressures on the government budget), private in-
vestment (
i
), public investment (
I
), total real consumption
(
C
), total real output (
Y
) and equivalent variation (
EV
).
17
The aim of this paper is to find the optimal fiscal pol-
icy in terms of growth and social transfers, which justifies
the order of the presentation of the following three subsec-
tions.
4.1.1 Tax Policy
We analyze fiscal policy solely on the basis of changes
in the rates of the four taxes considered in our model.
Simulating import tariff reductions and increases allow us
to analyze a more or less open economy. For instance,
a 0-percent tariff represents a completely open economy,
whereas a 20-percent tariff implies fewer links to the world
economy. The simulated tax change in the value added tax
scenario is an increase up to the Latin American average.
According to Otalora (2009) the Latin American average is
14.05 percent. The capital and hydrocarbon tax simulations
involve a 10-percent increase and decrease for each of these
tax rates. Table 3 displays the results of the tax policy sim-
ulations.
Notice that a fully open economy (column 1) allows
the economy to grow by 3.3 percent relative to the base-
line scenario, with welfare increasing by 3.86 percent. The
reduction in the price of the (importable) capital good in-
creases marginal productivity in the exportable and non-
tradable sectors, while this figure remains constant in the
importable sector. Therefore
Y
xh
,
Y
xa
,
Y
xm
and
Y
n
increase
and
Y
m
decreases by 0.26 percent. Consistent with the tariff
reduction, the real exchange rate depreciates by 5 percent.
The opposite effects occur when there is an increase in the
import tariff (second column). Indeed, most of the results
have a similar magnitude with the opposite sign except for
transfers as a share of GDP. Opening the economy results
in an 8.1-percent decline in transfers due to the decrease
in government revenues, whereas these transfers only in-
crease by 1.54 percent in the simulation of a more closed
economy.
Variables
∇
τ
m
∇
τ
m
∇
τ
c
∇
τ
k
∇
τ
k
∇
τ
xh
∇
τ
xh
∇
τ
m
,
∇
τ
k
,
∇
τ
xh
,
∇
τ
c
∇
τ
c
∇
τ
c
Simulated
0
0.2
0.1405
0.117
0.143
0.288
0.352
0,
0.117,
0.352,
value
0.1348
0.1322
0.1380
c
m
6.49
−
5.55
−
0.51
2.28
−
2.32
3.55
−
3.39
6.32
2.19
−
3.78
c
n
2.05
−
2.15
0.42
1.34
−
1.41
2.25
−
2.23
2.30
1.46
−
1.93
Y
xh
18.03
−
14.85
1.02
2.47
−
2.57
11.61
−
10.90
18.65
2.74
−
10.21
Y
xa
2.03
−
2.00
0.36
0.29
−
0.30
0.51
−
0.52
2.20
0.37
−
0.27
Y
xm
2.92
−
2.84
0.40
0.41
−
0.45
0.63
−
0.69
3.13
0.50
−
0.37
Y
m
−
0.26
0.02
−
0.63
2.00
−
2.00
0.57
−
0.59
−
0.53
1.88
−
1.09
Y
n
2.05
−
2.15
0.42
1.34
−
1.41
2.25
−
2.23
2.30
1.46
−
1.93
p
n
−
5.05
5.20
−
0.90
0.98
−
0.99
1.38
−
1.28
−
5.42
0.79
−
1.98
Γ
/
GDP
−
8.10
1.54
17.60
−
3.83
3.26
11.96
−
13.28
0.00
0.00
0.00
i
6.57
−
5.26
−
1.23
3.58
−
3.55
3.57
−
3.31
6.03
3.33
−
4.25
I
−
1.56
0.12
3.89
−
0.44
0.27
3.48
−
3.57
0.27
0.43
−
0.72
C
4.03
−
3.67
0.01
1.76
−
1.81
2.83
−
2.75
4.09
1.79
−
2.75
Y
3.30
−
3.02
0.13
1.56
−
1.60
2.59
−
2.51
3.41
1.61
−
2.43
TU
3.86
−
3.82
−
0.02
1.71
−
1.83
2.71
−
2.79
3.91
1.73
−
2.81
Source: Author’s calculations
Table 3.
Change in steady-state values from a tax policy (in percentages).
17
To abstract from changes in relative prices, total consumption (
C
) and total output (
Y
) are measured at the initial baseline prices.
EV
is defined
as the subsidy (or tax, if negative) in terms of consumption of importables, non-tradables and public services needed to compensate the consumer for
them to be indifferent between the situation before and after policy change.
66
Analítika,
Revista de análisis estadístico
, 2 (2012), Vol. 4(2): 57-79