Munich Personal RePEc Archive

Capital Income Tax, Linear R&D Technology, and Economic Growth

Tenryu, Yohei (2017): Capital Income Tax, Linear R&D Technology, and Economic Growth.

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Abstract

This paper shows that, in a R&D-based growth model in which vertical and horizontal innovations occur simultaneously, increasing the capital income tax leads to faster growth. For this result to hold, the production function for both vertical and horizontal innovations must have constant returns to scale.

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