“Fiscal Devaluation” and Fiscal Consolidation: The VAT in Troubled Times; by Ruud de Mooij and Michael Keen; IMF Working Paper 12/85; March 1, 2012

Abstract

This paper focuses on two core tax design issues that arise in addressing current fiscal challenges. It first explores the idea, prominent in troubled Eurozone countries, of a “fiscal devaluation”: shifting from social contributions to the VAT as a way to mimic a nominal devaluation. Empirical evidence is presented which suggests that in Eurozone countries… (More)

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