We study fiscal devaluation (i.e., revenue-neutral shift from payroll to consumption tax) in a two-country model of international trade. We analyze how such a policy modifies competition between heterogeneous producers, endogenous markups, and the allocation of inputs. We show that fiscal devaluation increases (resp. decreases) consumption in the net importing (resp. net exporting) country, regardless of which country implements the policy. Numerical illustrations suggest that fiscal devaluation is a deflationary policy. In most cases, input resources are reallocated to less productive firms, partly because of the deformation of the profit structure along the distribution of productivity.

中文翻译：

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内生加价导致的财政贬值：生产力和福利*

我们研究了两国国际贸易模型中的财政贬值（即收入中性从工资到消费税的转变）。我们分析了这种政策如何改变异质生产者之间的竞争、内生加价和投入的分配。我们表明，无论哪个国家实施该政策，财政贬值都会增加（或减少）净进口（或净出口）国家的消费。数字说明表明，财政贬值是一种通缩政策。在大多数情况下，投入资源被重新分配给生产力较低的公司，部分原因是利润结构在生产力分配过程中发生了变形。