Taxation, bubbles and endogenous growth

Stefano Bosi (University of Evry Paris-Saclay) & Ngoc-Sang Pham (EM Normandie Business School)

 

We study the interplay between taxation, bubble formation and economic growth. A rational bubble may be beneficial when growth is fueled by public investment (or R&D externalities) and the government levies taxes on bubble returns to finance this investment. Our main result challenges the conventional view about the negative effect of bubbles in endogenous growth (Grossman and Yanagawa, 1993).

 

Published in

Economic Letters, 2016


Research Group


Shared

This site uses cookies and gives you control over which ones you activate later

Cookies Management