The Role of Taxes as Automatic Destabilizers in New Keynesian Economics
AbstractThis paper analyses the effects of taxation in New Keynesian economics. The results show that taxes contribute to price and wage stickiness and, moreover, that the resulting fluctuations in welfare are magnified by the presence of taxes. These results are at odds with the old Keynesian idea of automatic stabilizers.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 399.
Date of creation: 2000
Date of revision:
New Keynesian economics; taxation; automatic stabilizersJEL Classification: E32; E62;
Other versions of this item:
- Kleven, Henrik Jacobsen & Kreiner, Claus Thustrup, 2003. "The role of taxes as automatic destabilizers in New Keynesian economics," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1123-1136, May.
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