This article provides optimal labour and dividend income taxation in a general equilibrium model with oligopolistic competition and endogenous firms’ entry. In the long run, the optimal dividend income tax corrects for inefficient entry. The dividend income tax depends on the form of competition and the nature of the sunk entry costs. In particular, it is higher in market structures characterised by competition in quantities rather than those characterised by price competition. Oligopolistic competition leads to an endogenous countercyclical price markup. As a result, offsetting the distortions over the business cycle requires deviations from full tax smoothing.

Colciago, A. (2016). Endogenous Market Structures and Optimal Taxation. ECONOMIC JOURNAL, 126(594), 1441-1483 [10.1111/ecoj.12293].

Endogenous Market Structures and Optimal Taxation

COLCIAGO, ANDREA
Primo
2016

Abstract

This article provides optimal labour and dividend income taxation in a general equilibrium model with oligopolistic competition and endogenous firms’ entry. In the long run, the optimal dividend income tax corrects for inefficient entry. The dividend income tax depends on the form of competition and the nature of the sunk entry costs. In particular, it is higher in market structures characterised by competition in quantities rather than those characterised by price competition. Oligopolistic competition leads to an endogenous countercyclical price markup. As a result, offsetting the distortions over the business cycle requires deviations from full tax smoothing.
No
Articolo in rivista - Articolo scientifico
Scientifica
Endogenous Market Structure; Firms’ Entry; Business Cycle
English
1441
1483
43
Nuova versione di "Imperfect Competition and Optimal taxation"
Colciago, A. (2016). Endogenous Market Structures and Optimal Taxation. ECONOMIC JOURNAL, 126(594), 1441-1483 [10.1111/ecoj.12293].
Colciago, A
File in questo prodotto:
File Dimensione Formato  
Colciago-2015-The_Economic_Journal.pdf

accesso aperto

Descrizione: Articolo
Tipologia di allegato: Author’s Accepted Manuscript, AAM (Post-print)
Dimensione 535.91 kB
Formato Adobe PDF
535.91 kB Adobe PDF Visualizza/Apri
Colciago-2016-The_Economic_Journal.pdf

Solo gestori archivio

Tipologia di allegato: Publisher’s Version (Version of Record, VoR)
Dimensione 515.83 kB
Formato Adobe PDF
515.83 kB Adobe PDF   Visualizza/Apri   Richiedi una copia

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10281/101351
Citazioni
  • Scopus 11
  • ???jsp.display-item.citation.isi??? 10
Social impact