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• W3135206670 abstract "Abstract We study fiscal devaluation (i.e., revenue‐neutral shift from payroll to consumption tax) in a two‐country model of international trade. We analyze how such a policy modifies competition between heterogeneous producers, endogenous markups, and the allocation of inputs. We show that fiscal devaluation increases (resp. decreases) consumption in the net importing (resp. net exporting) country, regardless of which country implements the policy. Numerical illustrations suggest that fiscal devaluation is a deflationary policy. In most cases, input resources are reallocated to less productive firms, partly because of the deformation of the profit structure along the distribution of productivity." @default.
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• W3135206670 date "2021-08-04" @default.
• W3135206670 modified "2023-10-04" @default.
• W3135206670 title "Fiscal Devaluation with Endogenous Markups: Productivity and Welfare*" @default.
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• W3135206670 doi "https://doi.org/10.1111/sjoe.12435" @default.
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