The general thrust of these reforms would include fiscal changes to reduce distortionary
taxation, strengthening competition and reducing regulations that damage productivity, and improving the quality of education.
This amounts to distortionary
subsidies via free allocation of emission permits on the basis of grandfathering.
Because of increasing marginal distortionary
costs of raising revenue through raising taxes, the government will choose a smooth path for taxes.
22) The differences in the distribution of productivity across establishments can potentially be the result of distortionary
policies and can be studied jointly, for example, by allowing the policy distortions to have an impact on the selection of establishments through entry/exit and on productivity investment by establishments.
Both models are partial in the sense that budget effects are disregarded and they both rely on the assumption that benefits are more distortionary
in a boom.
In this strand of the literature, the government's problem consists of financing an exogenous stream of public spending by choosing the least disruptive combination of inflation and distortionary
In Equation (7), each voter trades off the marginal redistributive benefit from taxation (in the form of the deviation between his own income and the economy's mean income, the left hand side) against the marginal distortionary
cost of taxation (in the form of a smaller tax base, the RHS).
The existence of other distortionary
taxes in the economy--even if not explicitly designed to mitigate the externality--will still have an effect on the observed Q.
Thus [pi] should be thought of throughout as a distortionary
These three changes can be achieved in a benefit- and revenue-neutral manner, and create a pattern of implicit tax rates that are much less distortionary
over the life cycle, eliminating the high implicit tax rates faced by many elderly workers.
These indicators are broadly consistent with a diagnosis that the typical European country was exposed to more regulation, weaker competition and more distortionary
taxation than the United States both before and after the mid-1990s.
9) Allowing a more complicated tax structure (that is, a distortionary
tax system with both capital and labor income taxes, along with variable labor supply) alone would not alter our clear-cut quantitative results as long as marginal projects are financed by changes in lump-sum taxes along with government borrowing.
This bargain, and others like it in all of Russia's regions, demonstrated the opaque and distortionary
incentives inherent in Russia's federalist relations.
The magnitude of this welfare cost is comparable to that associated with other distortionary
At stake is the need to take pressures off real interest and exchange rates and their distortionary
effects on resource allocation decisions.