The Danish economy was growing at near to capacity when the world economic downturn struck.(Brief Article)

Economist (US), The, March, 2002

The Danish economy was growing at near to capacity when the world economic downturn struck. Growth last year was down to about 1.3%, says the OECD in a recent survey, and activity is expected to stay weak before accelerating in the middle of this year. The OECD says that Denmark's fiscal system could do with some reforms.

Local governments have raised income taxes above nationally agreed levels, acting against the government's efforts to improve work incentives. It might be better to allow local governments to vary personal income-tax allowances rather than tax rates. Labour supply could be encouraged by reducing marginal labour-tax rates, and more could be done make Denmark's large public sector more efficient, perhaps by introducing more competition in the...

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