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This book contains a spectrum of empirical models of fiscal policy from acknowledged specialists from a range of different developed countries. The importance of tax policy on corporate and consumer behaviour is stressed. The particular relevance of such policies in the light of the harmonization of fiscal policies within the European Community is brought out at length but the interest in what is presented here is certainly not confined to Europe. The book is published on behalf of the Applied Econometrics Association and the chapters are selected and revised from those presented at an international meeting of that association held in Rome. All those professionally concerned with public finance or seeking to get an update on current thinking in this rapidly advancing area of economics may find this volume useful.
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Alberto Heimler and Daniele Meulders In the last decade the modelling of the interrelationship between public finance and the rest of the economy has seen substantial advances, reflected in many of the papers delivered to the Applied Econometrics Association Conference held at Confindustria, Rome, on 30 November and 1 December 1989. In particular, the development of the literature on applied general-equilibrium modelling has found most of its applications in the field of taxation, enlarging and completing the estimation of the welfare loss due to distortionary taxes. In this context an important extension has been the introduction of overlapping-generation models. Furthermore, it has become clear that most individual decisions, especially the decision whether or not to work, are dependent upon the tax system, in the sense that the higher the marginal income tax the larger the wedge between labour cost and take-home pay, the last one being the decision variable in the demand for leisure. Finally, in the European context, the completion of the internal market has brought about the necessity to harmonize fiscal systems in the EEC member countries. A number of papers study, therefore, the effects of fiscal reform on efficiency, welfare and growth.