| ID | 086586 |
| Title Proper | Government budget, public-sector wages and capital taxes in a small open economy |
| Other Title Information | Hong kong case |
| Language | ENG |
| Author | Chao, Chi-Chur ; Yu, Eden S H ; Yu, Wusheng |
| Publication | 2009. |
| Summary / Abstract (Note) | This paper examines the welfare implications of adjustments in public-sector wages and capital tax rates for a small open economy in a general equilibrium setting. The individually and jointly optimal wage and tax policies are derived and interpreted. Facing reductions in land sales and falls in foreign interest rates, a cut in public workers' pay is needed to make their wage comparable to the private sector and a hike in capital taxes is recommended for a budgetary consideration. Using a computable general equilibrium model for Hong Kong, we numerically evaluate the various optimal policies which not only confirm the theoretical results but also provide quantitative estimates of the optimal policy variables. |
| `In' analytical Note | China Economic Review Vol. 20, No. 1; Mar 2009: p.54-64 |
| Journal Source | China Economic Review Vol. 20, No. 1; Mar 2009: p.54-64 |
| Key Words | Public-Sector Wages ; Capital Taxes ; Computable General Equilibrium ; Asian Financial Crisis ; Hong Kong ; Economy |