The Social cost of government spending in an economy with large tax distortions. A CGE decomposition for Norway

摘要: We use a CGE model to estimate the social cost of marginal increase in public expenditure Norway. Norway exemplifies an economy with high taxes. Distortionary taxes imply wedges between market prices and corresponding shadow prices. The are unobservable, which is rationale for using government consumption. decomposed into direct resource funds. implicitly weighted average different opportunity costs, reflecting distortions Norwegian economy. Our equals about ¾ ex ante price resources consumed. This gap due positive labour supply response combined effective tax rate on income. raising funds through higher pay-roll 20 percent cost.