Policy distortions and aggregate productivity with heterogeneous establishments

Restuccia, Diego; Rogerson, Richard

doi:10.1016/j.red.2008.05.002

Cited by 1,203 publications

(823 citation statements)

References 29 publications

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“…The development literature has shown that both channels are important in accounting for cross-country income and TFP differences. 1 In particular, Restuccia and Rogerson (2008) argues that a country's policies and institutions can create "taxes" or "subsidies" modeled as a tax or subsidy on output that distort the allocation of resources across firms. In this paper, we follow this idea and measure most of our indicators for business environment as a tax on output.…”

Section: Introductionmentioning

confidence: 99%

“…We use those losses to construct a measures of the "tax" on output emphasized by Restuccia and Rogerson (2008). We view this as one of the contributions of this paper.…”

Section: Introductionmentioning

confidence: 99%

“…To quantify the effects of the five dimensions of business environment on African economic development, we introduces the policy distortions highlighted by Restuccia and Rogerson (2008) in the general equilibrium model studied by Amaral and Quintin (2009). In the model, workers are born with a managerial ability and decide wether to operate a business. If they choose to do so, they can either use their own savings or borrow to finance capital for production.…”

Section: Introductionmentioning

confidence: 99%

“…They introduce the type of distortions emphasized by Restuccia and Rogerson (2008) in a model of heterogenous firms based on Melitz (2003). Using firm data from 79 countries, they infer from the model the distortions needed to match the plant-size distribution in each country.…”

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Impact of the business environment on output and productivity in Africa

Bah

Fang

2015

Journal of Development Economics

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Section: Introductionmentioning

confidence: 99%

“…We use those losses to construct a measures of the "tax" on output emphasized by Restuccia and Rogerson (2008). We view this as one of the contributions of this paper.…”

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Impact of the business environment on output and productivity in Africa

Bah

Fang

2015

Journal of Development Economics

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“…Thus, the dividend tax cuts generate efficient reallocation of capital from less productive (mature) firms to more productive (immature) firms. 11 11 See Restuccia and Rogerson (2008) and Buera and Shin (2009) for related analysis where changes in reallocation friction lead to increased aggregate productivity.…”

Section: Unexpected Permanent Dividend and Capital Gains Tax Cutsmentioning

confidence: 99%

Transitional dynamics of dividend and capital gains tax cuts

Gourio

Miao

2011

Review of Economic Dynamics

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We develop a dynamic general equilibrium model to study the impact of the 2003 dividend and capital gains tax cuts. In the model, firms are heterogeneous in productivity and make investment and financing decisions subject to capital adjustment costs, equity issuance costs, and collateral constraints. We show that when the dividend and capital gains tax cuts are unexpected and permanent, dividend payments, equity issuance, and aggregate investment rise immediately. By contrast, when these tax cuts are unexpected and temporary, aggregate investment falls in the short run. This fall allows firms to distribute large dividends initially in response to the temporary dividend tax cut. We also find that the effects of a temporary dividend tax cut are very different from those of a temporary capital gains tax cut.

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After Papua New Guinea's Resource Boom: Is the Kina Overvalued?

Fox

Schröder

2017

Asia & Pacific Policy Stud

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Papua New Guinea's (PNG) resource boom has come to an end. Theory suggests that the real exchange rate (RER) should subsequently depreciate in order to restore internal and external balance. In practice, however, the imposition of foreign exchange controls has led to a large backlog in foreign currency orders suggesting that the RER is significantly overvalued. The purpose of this paper is to inform the ongoing policy debate surrounding this issue by estimating the extent to which PNG's RER is currently misaligned. Our results suggest that the kina should depreciate by about 20% to close the gap between the actual and equilibrium value of the RER. Otherwise PNG is likely to pay high economic costs as real overvaluation sustained through foreign exchange restrictions led to resource misallocation, lower economic growth, black markets, and ultimately a balance of payments crisis in many other developing countries in the past.

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Policy distortions and aggregate productivity with heterogeneous establishments

Cited by 1,203 publications

References 29 publications

Impact of the business environment on output and productivity in Africa

Impact of the business environment on output and productivity in Africa

Transitional dynamics of dividend and capital gains tax cuts

After Papua New Guinea's Resource Boom: Is the Kina Overvalued?

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