Fiscal Policy as a Determinant of Consumption Expenditure: The Estonian Case
AbstractThe aim of the paper is to analyze and explain the impacts of fiscal policy on households’ consumption. Specifically we analyze the role of both discretionary and non-discretionary fiscal policy on consumption. The authors examine tax system in Estonia and distribution of income between households. In the paper the impact of different tax systems on consumption has been estimated. The analysis shows that the exchange of flat income tax to progressive income tax have a little effect on smoothing of households consumption, but can increase the burden on general government budget. It also reveals that the role of fiscal policy on private consumption has been limited. This study will rely on analysis of statistical data on households’ income and expenditures as well as on time-series analysis of aggregated data of GDP, consumption and income tax.
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Bibliographic InfoPaper provided by Tallinn School of Economics and Business Administration, Tallinn University of Technology in its series Working Papers with number 111.
Date of creation: 2004
Date of revision:
Publication status: Published in Working Papers in Economics.School of Economics and Business Administration,Tallinn University of Technology (TUTWPE), Pages 117-138
Note: This research was conducted with support from the Estonian Science Foundation (Research Project 5146).
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tax reform; tax policy; consumption expenditure of household; automatic stabilizers.;
Find related papers by JEL classification:
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
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