Investment socialization and tax reform: The Mexican case, 1950-2020
Based on Keynes’ arguments, this paper aims to show that, even assuming an equilibrated primary fiscal balance, it can be possible to use fiscal policy to stabilize the equilibrium output, increase the output growth rate and disposable income, and relax the external constraint on growth. Our theoret...
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2021 |
| País: | México |
| Institución: | Benemérita Universidad Autónoma de Puebla |
| Repositorio: | Redalyc-BUAP |
| OAI Identifier: | oai:redalyc.org:60171807003 |
| Acceso en línea: | https://www.redalyc.org/articulo.oa?id=60171807003 https://www.redalyc.org/journal/601/60171807003/ https://www.redalyc.org/journal/601/60171807003/html/ https://www.redalyc.org/journal/601/60171807003/60171807003.epub https://www.redalyc.org/journal/601/60171807003/movil |
| Access Level: | acceso abierto |
| Palabra clave: | Economía y Finanzas E12 E62 H54 H61 O47 |
| Sumario: | Based on Keynes’ arguments, this paper aims to show that, even assuming an equilibrated primary fiscal balance, it can be possible to use fiscal policy to stabilize the equilibrium output, increase the output growth rate and disposable income, and relax the external constraint on growth. Our theoretical arguments are empirically tested for the case of Mexico. As shown, after the debt crisis of the last century, Mexican policymakers maintained a primary balance equilibrium rule. However, a significant public expenditure reduction was implemented, primarily concentrated on public investment, which has negatively affected economic growth and the trade balance as a percentage of the Gross Domestic Product (GDP). We argue that it is necessary to increase public revenues, mainly through a tax reform, to implement an investment socialization program. |
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