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Only in Harvard can you promote the nonsense below.
http://www.bloomberg.com/news/2013-02-06/harvard-s-gopinath-helps-france-beat-euro-straitjacket.html 

First off, FX fluctuations are much stronger and faster than a government can possibly keep up with VAT vs payroll changes (look at EURUSD since the introduction of the Euro for proof). Second, VAT affects everyone, including a bunch of people who are not affected by payroll taxes (retirees, students, people out of work...). You think that raising VAT to an extent that really would move the needle would be politically and socially acceptable?

I will try to catch up on Gopinath's actual research because Bloomberg makes it sound delusional - there must be more to it. I like consumption taxes much more than other forms of taxation that punish savings, investment or work, but given France's loss of competitiveness and its fiscal straight-jacket  this is tinkering at the edges that cannot compete in magnitude with a devaluation. Road patches are not the adequate solution to rebuild after a major earthquake.
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