Publications [#379658] of Pietro F. Peretto

Journal Articles

1. Iacopetta, M; Peretto, PF, Business taxes, management delegation, and growth, European Economic Review, vol. 170 (November, 2024) [doi]
   (last updated on 2025/06/21)

   Abstract:
   We examine the interaction between agency issues and business taxation in a growth model with an endogenous market structure. Agency issues arise from two types of management delegation: day-to-day production and research and development (R&D) activities. We calibrate the model to the US economy. A reduction in profit tax fosters business dynamics, R&D investments, and income growth in the short and medium term but hampers long-term growth. Lower-quality governance dampens short-term income gains and amplifies long-term growth losses. Additionally, we compare the effects of profit tax cuts with those from dividend and executive income tax cuts. Our analysis includes a welfare and inequality evaluation of profit tax reforms.