Munich Personal RePEc Archive

Federalismo fiscal en Argentina: Un análisis de efectos spillover mediante un CGE regional

Mastronardi, Leonardo Javier (2013): Federalismo fiscal en Argentina: Un análisis de efectos spillover mediante un CGE regional.

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The aim of this paper is to analyze the spillover effects of national and local tax policies in Argentina. To this aim, I develop a static bi-regional general equilibrium model for the Buenos Aires City (CABA) and the rest of Argentina. The BAC is relevant for the rest of the country because it represents 7% of the population of the country, but 28% of its GDP and a significant proportion of the remuneration of capital of the whole country is paid to BAC residents. For the construction of the regional SAM I used the methodology developed by Flegg (1997, 2000) and Robinson et al. (2001), and the computable general equililbrium model is presented in MPSGE framework (Rutherford, 1988). I analyze the impact of fiscal policies on welfare of private agents and the spillover effects on the performance of the public sector of both regions using equal-revenue tax increases simulations. As expected, the model shows that regional and national fiscal policies do have relevant effects on the activity level in both regions and on the welfare of their inhabitants. The paper also presents sensitivity analyses, taking into account changes in the level of indexation of wages and in degree of capital mobility. Both parameters are relevant for the quantitative results. The results show that: (i) an increase in local taxes produces negative spillovers on the other region on the welfare of households and in the activity levels –the effect in CABA is more significant; (ii) an increase in national value added tax is significant for CABA indicators since it specialized in the production of services; (iii) the results are stronger under a minimum real wages condition, and; (iv) capital mobility is a key factor to determine the importance of regional negative fiscal spillovers.

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