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- Effect of the Tax System ON R&D Intensity, Growth, Wages and Consumption SharePublication . Afonso, Oscar; Bandeira, Ana M.; Magalhães, ManuelaWe propose a general equilibrium knowledge-driven (semi-)endogenous-growth model with horizontal R&D, which is extended to consider two types of labour, skilled and unskilled, and exogenous government expenditure, financed through taxes on financial assets and on labour income, to analyse the implications of the tax system on R&D intensity, economic growth, wage inequality and consumption share in the output. In particular, we show that: (i) taxes have negative influence in the consumption share, being higher the marginal effect of the labour-income tax; (ii) for any given government expenditure share, an increase (a decrease) in financial-assets tax decreases (increases) the labour-income tax; (iii) only the financial-assets tax affects negatively the R&D intensity and the skill-premium; thus, to reduce the skill-premium the financial-assets tax must increase; (iv) ignoring the effect on wage inequality and on R&D intensity, taxes are substitutes.
- Labour-market institutions, (un)employment, wages, and growth: theory and dataPublication . Afonso, Oscar; Bandeira, Ana M.; Magalhães, ManuelaWe analyse the implications of labour-market institutions on wage inequality in favour of skilled labour, on relative unemployment of unskilled labour, and on the economic growth rate in two clusters resulting from 27 OECD countries: Cluster 1, closely related with the Anglo-Saxon model, and Cluster 2, dominated by the Continental-European model. By linking the unskilled wage to the skilled one in Cluster 2, due to the indexation of social benefits to per-capita income, we accommodate the observed paths of the three variables in both clusters between 1991 and 2008: Cluster 1 presents a higher wage inequality in favour of skilled labour, a lower unemployment of the unskilled labour, and a better economic growth rate