The Impact of Labor Taxes on Labor Supply: An International
Perspective
Vincent ReinhartResident ScholarApril 18, 2011
The Road to Stable Public Finances The Importance of Being
Prudent--Sweden's Fiscal Approach
11Vincent ReinhartResident ScholarApril 18, 2011Getting to know
a Swedish Model22The fiscal position of AEs and EMEs in
20093AEsEMEsIMF, Fiscal Monitor (4/11)3but the IMF expects the
situation to improve4G-20 AEsG-20 EMEsIMF, Fiscal Monitor
(4/11)4Much of the improvement is cyclical in the aggregate 5G-20
AEsG-20 EMEsIMF, Fiscal Monitor (4/11)5and across countries from
2009 to 20116IMF, Fiscal Monitor (4/11)6As also reflected in the
composition of deficit reduction from 2009 to 20117IMF, Fiscal
Monitor (4/11)7We know from R&R that economies grow more slowly
after a severe financial crisis RealGrowth ofUnemploy-Change
inhouse Real GDPmentequitypricesper
capitaratepricesT-1=100percentlevelT-10 to T-63.34.18.173.3T-5 to
T-24.43.514.592.1T-1 3.23.4-15.1100.0T (Crisis) 1.65.1-27.695.1T+1
-5.86.8-4.583.7T+2 to T+53.09.010.976.4T+6 to
T+103.86.212.182.8Source: Carmen Reinhart and Vincent Reinhart,
"After the Fall," Jackson Hole Symposium, 8/201088and from R&R
that economies encumbered by debt grow more slowly99Thus, the real
growth imbalance between AEs and EMEs will stay wide1010With this
growth imbalance,Slow-growing AEs willFast-growing EMEs will11Keep
monetary policy accommodativeSeek to enlarge the market for
government debt Continue to import a U.S. monetary policy that is
inappropriate for domestic conditionsBoth will be more favorably
inclined to placing restrictions on finance11Vincent
ReinhartResident Scholar1150 Seventeenth Street, N.W., Washington
DC 20036email: [email protected] website:
http://www.aei.org/scholar/129Phone: (202) 419-5203
