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Macroeconomic Implications of Alternative Tax Regimes: The Case of Greece

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  • Dimitris Papageorgiou

    ()
    (Athens University of Economics and Business)

Abstract

This paper uses a Dynamic General Equilibrium model that incorporates a detailed fiscal policy structure to examine how changes in the tax mix influence economic activity and welfare in the Greek economy. The results suggest that tax reforms that reduce the labour and capital income tax rates and increase the consumption tax rate lead to higher levels of output, consumption and private investment. If the goal of tax policy is to promote economic growth by changing the tax mix, then it should reduce the capital income tax rate and increase the consumption tax rate. In contrast, a lifetime welfare promoting policy would be to cut the labour income tax rate and increase the consumption tax rate.

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Bibliographic Info

Paper provided by Bank of Greece in its series Working Papers with number 97.

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Length: 48 pages
Date of creation: May 2009
Date of revision:
Handle: RePEc:bog:wpaper:97

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Web page: http://www.bankofgreece.gr
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Related research

Keywords: Fiscal Policy; Transitional dynamics; Economic growth; Welfare;

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References

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Citations

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Cited by:
  1. Vasilis Droucopoulos & Panagiotis Chronis, 2010. "“Assessing market dominance”: a comment and an extension," Working Papers 109, Bank of Greece.
  2. Dimitrios Sideris, 2011. "Optimum currency areas, structural changes and the endogeneity of the OCA criteria: evidence from six new EU member states," Applied Financial Economics, Taylor & Francis Journals, vol. 21(4), pages 195-206.
  3. Dimitris Papageorgiou, 2011. "Fiscal policy, economic activity and welfare: the case of Greece," Economics Bulletin, AccessEcon, vol. 31(3), pages 2629-2640.
  4. Papageorgiou, Dimitris, 2012. "Fiscal policy reforms in general equilibrium: The case of Greece," Journal of Macroeconomics, Elsevier, vol. 34(2), pages 504-522.
  5. Annicchiarico, Barbara & Di Dio, Fabio & Felici, Francesco, 2013. "Structural reforms and the potential effects on the Italian economy," Journal of Policy Modeling, Elsevier, vol. 35(1), pages 88-109.

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