Guy Laroque

Professor Guy Laroque

Research Fellow

Education:

D.E.A. Mathématiques appliquées à l'Économie, Université Paris IV, 1971

D.E.S. Sciences Économiques, Université Paris , 1971

École Nationale de la Statistique et de l'Administration Économique ENSAE, 1970

École Polytechnique, 1965

ORCID: 0000-0003-1109-4703

Guy is a Research Fellow at the IFS and was involved with the Mirrlees Review of the UK tax system. He is also a Professor at Sciences Po and at University College London. Guy is head of the Macroeconomics Laboratory at CREST, the research centre of the French statistical agency INSEE. His research revolves around macroeconomic issues, with contributions to theory, econometric techniques and applications.

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Production efficiency and profit taxation

| Working Paper

Consider a simple general equilibrium economy with one representative consumer, a single competitive firm and the government. Suppose that the government has to finance public expenditures using linear consumption taxes and/or a lump-sum tax on profits redistributed to the consumer. We show that, if the tax rate on profits cannot exceed 100 percent, one cannot improve upon the second-best optimum of an economy with constant returns to scale by using a less efficient profit-generating decreasing returns to scale technology.

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