Optimal fiscal policy in a model of firm entry and financial frictions

被引：0
|
作者：
Cooke, Dudley [1 ]
Damjanovic, Tatiana [2 ]
机构：
[1] Univ Exeter, Dept Econ, Streatham Court, Rennes Dr, Exeter EX4 4PU, Devon, England
[2] Univ Durham, Dept Econ, Mill Hill Lane, Durham DH1 3LB, England
来源：
REVIEW OF ECONOMIC DYNAMICS | 2020年 / 35卷
关键词：
Idiosyncratic uncertainty; Financial frictions; Firm entry; Optimal fiscal policy; MULTIPRODUCT FIRMS; BUSINESS; UNCERTAINTY; FLUCTUATIONS; DYNAMICS; PRODUCTIVITY; TAXATION; RETURNS; MARKUPS; COSTS;
D O I：
10.1016/j.red.2019.05.001
中图分类号：
F [经济];
学科分类号：
02 ;
摘要：
This paper studies firm entry with financial frictions. We motivate our analysis by documenting that a fall in firm entry and a widening of the interest rate spread occur when there is a rise in idiosyncratic uncertainty. We then develop a model of firm entry and financial frictions - with fluctuations in the volatility of firm-level demand shocks - consistent with this empirical evidence. Finally, we study dividend and labor-income taxation. Financial frictions weaken the incentive to support firm entry, and in a calibrated version of our model, accounting for the increase in volatility observed during the 2007-09 recession, optimal fiscal policy raises (lowers) dividend (labor)-income taxes by up to 7 (1.5) percentage points. (C) 2019 Elsevier Inc. All rights reserved.
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页码：74 / 96
页数：23
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