Optimal Incentives to Domestic Investment in the Presence of Capital Flight

Razin, Assaf

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Optimal Incentives to Domestic Investment in the Presence of Capital Flight

IMF Working Paper No. 89/79

19 Pages Posted: 15 Feb 2006

See all articles by Assaf Razin

Assaf Razin

Tel Aviv University - Eitan Berglas School of Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

There are 2 versions of this paper

Date Written: September 28, 1989

Abstract

This paper develops a model of an open economy which employs distortionary taxes to finance public consumption, and with an access to the world capital market. The paper examines the efficiency of quantity restrictions on capital exports and the accompanying set of taxes. A distinction is made between a benchmark case where the government can fully tax foreign-source income and a more realistic case where the government cannot effectively tax foreign-source income.

JEL Classification: 320, 430

Suggested Citation: Suggested Citation

Razin, Assaf, Optimal Incentives to Domestic Investment in the Presence of Capital Flight (September 28, 1989). IMF Working Paper No. 89/79, Available at SSRN: https://ssrn.com/abstract=884995