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A Note on Commodity Taxation and Economic Growth

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  • Kunihiko Konishi

    (Osaka University)

Abstract

This study reexamines the growth effect of commodity taxation in a variety-expansion model. Integrating endogenous labor supply, a linear utility function for consumption, and an additively separable utility function for consumption and leisure, we derive results that contrast with those of previous analyses in certain respects. If the elasticity of labor supply with respect to commodity taxation is sufficiently high, an increase in the commodity tax rate can decrease the short-run growth rate.

Suggested Citation

  • Kunihiko Konishi, 2015. "A Note on Commodity Taxation and Economic Growth," Economics Bulletin, AccessEcon, vol. 35(1), pages 540-549.
    • Handle: RePEc:ebl:ecbull:eb-14-00875
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I1-P58.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Commodity taxation; Labor supply; Endogenous growth;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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