Border-Adjusted Consumption Taxes and Exchange Rate Movements: Theory and Evidence
Description:
This report provides a basic framework for understanding how and why exchange rates could respond to a Border-Adjusted Tax (BAT). It first describes a BAT(which does not tax exports) and uses several examples to illustrate how one works. It then summarizes the standard economic theory of how exchange rates should respond to a BAT, as well as the arguments against the theoretical predictions. Finally, this report reviews the existing literature that has empirically investigated the relationship…
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Date:
April 18, 2017
Creator:
Driessen, Grant A. & Keightley, Mark P.
Item Type:
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Partner:
UNT Libraries Government Documents Department