1988 Fiscal Year Final Research Report Summary
Tax System of Savings and Investment in the United States and Japan : International Economic Policy Coordination
| Project/Area Number |
61410015
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| Research Category |
Grant-in-Aid for General Scientific Research (A)
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| Allocation Type | Single-year Grants |
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| Research Field |
一般理論
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| Research Institution | Osaka University |
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Principal Investigator |
YASUBA Yasukichi Department of Economics, Osaka University, Professor, 経済学部, 教授 (80028034)
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| Co-Investigator(Kenkyū-buntansha) |
BAN Kanemi Department of Economcis, Osaka University, Associate Professor, 経済学部, 助教授 (30027578)
IHORI Toshihiro Department of Economcis, Osaka University, Associate Professor, 経済学部, 助教授 (40145652)
UEDA Kazuo Department of Economcis, Osaka University, Associate Professor, 経済学部, 助教授 (90151787)
NAKATANI Iwao Department of Economcis, Osaka University, Professor, 経済学部, 教授 (10028053)
ROYAMA Shoichi DEpartment of Economcis, Osaka University, Professor, 経済学部, 教授 (60012126)
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| Project Period (FY) |
1986 – 1988
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| Keywords | Savings and INvestment / International Economic policy Coordination / Tax / Tax Coordination / INternational Economy / 税制 |
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| Research Abstract |
In this study, we evaluate the international economic policy coordination between the United States and Japan. In early 1980's, Reagan administration reformed the tax system to stimulate savings and investment in the United States. Our study pointed out that the tax reform stimulated investment, but not savings. As a result, the United States experienced the huge trade deficit to finance the increased investment. We proposed that the United States should increased the tax to reduce the consumption. For example, the gasoline tax in 10 cents per gallon results in increase in tax revenue by 20 billions dollars. On the other hand, Japanese government decided to abandon the "Maruyu", tax exempt system for savings, cut the tax rate on personal and business income, and introduce the sales tax. The main object of tax reform is to discourage savings and stimulate investment in Japan. We estimated how the tax reform plan have the impact on the individual households and cooperate firms.
This tax reform in both countries has a strong impact on the world economy. We pointed out that tax reform should be neutral to the economy and tax system should be coordinate between the countries. If tax system is not neutral and different between the countries, imbalance will be enlarged. Trade imbalance between the United States and Japan is mainly due to the lack of tax coordination. If there does nor exist tax coordination, internatinal macro economic policy coordination does not have any meanings.
We also pointed out that the United States has some kind of leadership role between the United States and Japan. We find that there exists rationality for the leader-follower assignment to offer Pareto-improving outcome for two countries.
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