Advanced Search
MyIDEAS: Login

The effect of the change in VAT rates on the consumer price index

Contents:

Author Info

  • Péter Gábriel

    ()
    (Magyar Nemzeti Bank (central bank of Hungary))

  • Ádám Reiff

    ()
    (Magyar Nemzeti Bank (central bank of Hungary))

Abstract

In the autumn of 2006 the Magyar Nemzeti Bank launched a series of research projects on the pricing of products and services with non-regulated prices, which is expected to last for one and a half years. Store-level price quotes used for the Hungarian CSO’s (Central Statistical Office) consumer price index calculation serve as a basis for the research. As a first step, we examined how earlier changes in VAT rates (the VAT increase in January 2004 and the VAT cut in January 2006) influenced the prices of products and services. Our analysis is of particular importance as the VAT rate of certain products increased again in September 2006. Our findings show that while a larger part of the VAT increase was transmitted into consumer prices within a few months, the VAT cut reduced consumer prices to a much smaller extent, thus adding to the profit of stores – at least in the short run.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://english.mnb.hu/Root/Dokumentumtar/ENMNB/Kiadvanyok/mnben_mnbszemle/mnben_MNB_Bulletin_December_2006/mnbsz_200612_gabriel-reiff_en.pdf
Download Restriction: no

Bibliographic Info

Article provided by Magyar Nemzeti Bank (the central bank of Hungary) in its journal MNB Bulletin.

Volume (Year): 1 (2006)
Issue (Month): 2 (December)
Pages: 14-20

as in new window
Handle: RePEc:mnb:bullet:v:1:y:2006:i:2:p:14-20

Contact details of provider:
Web page: http://www.mnb.hu/
More information through EDIRC

Related research

Keywords: Consumer Price Index; state dependent pricing; VAT-rates.;

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Dániel Felcser, 2013. "How should the central bank react to the VAT increase?," MNB Bulletin, Magyar Nemzeti Bank (the central bank of Hungary), vol. 8(1), pages 35-41, January.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mnb:bullet:v:1:y:2006:i:2:p:14-20. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maja Bajcsy).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.