General Equilibrium Effects Fo Taxation on Investment in a Developing Country: The Case of Pakistan

Public Finance, Vol. 48, No. 3, 1993

Posted: 28 Feb 2006

See all articles by Andrew Feltenstein

Andrew Feltenstein

Georgia State University - Department of Economics

Anwar Shah

World Bank

Abstract

In this paper we specify a dynamic general equilibrium framework to evaluate the cost effectiveness of incentives for industrial and technological development offered through the tax code in Pakistan. The model enables us to estimate adjustment effects on factor use and output arising from a tax incentive policy change. Detailed calculations are presented showing change in output, use of capital by sector, changes in tax revenue paid by each sector and impacts on macroeconomic aggregates. Welfare gains and losses of urban and rural consumers associated with proposed policy changes are also estimated.

Keywords: Taxation, Investment, Pakistan

JEL Classification: D58, H24

Suggested Citation

Feltenstein, Andrew and Shah, Anwar, General Equilibrium Effects Fo Taxation on Investment in a Developing Country: The Case of Pakistan. Public Finance, Vol. 48, No. 3, 1993. Available at SSRN: https://ssrn.com/abstract=886569

Andrew Feltenstein (Contact Author)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-4130093 (Phone)

Anwar Shah

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

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