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Balanced budget multiplier with indirect taxes under imperfect competition

Author

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  • Ramón J. Torregrosa Montaner

    (Universidad de Salamanca)

Abstract

This paper presents two counter-examples to the Keynesian features attributed to imperfect competition in general equilibrium models. In particular, by considering indirect tax rates, a non positive and monotonically non-increasing relationship between the magnitude of both the balanced budget and welfare multipliers and market-power is obtained.

Suggested Citation

  • Ramón J. Torregrosa Montaner, 2003. "Balanced budget multiplier with indirect taxes under imperfect competition," Estudios Económicos, El Colegio de México, Centro de Estudios Económicos, vol. 18(1), pages 3-13.
    • Handle: RePEc:emx:esteco:v:18:y:2003:i:1:p:3-13
    as

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    File URL: https://estudioseconomicos.colmex.mx/index.php/economicos/article/view/190/192
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    References listed on IDEAS

    as
    1. Oliver Hart, 1982. "A Model of Imperfect Competition with Keynesian Features," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 97(1), pages 109-138.
    2. Dixon, Huw, 1987. "A Simple Model of Imperfect Competition with Walrasian Features," Oxford Economic Papers, Oxford University Press, vol. 39(1), pages 134-160, March.
    3. Blanchard, Olivier Jean & Kiyotaki, Nobuhiro, 1987. "Monopolistic Competition and the Effects of Aggregate Demand," American Economic Review, American Economic Association, vol. 77(4), pages 647-666, September.
    4. Molana, Hassan & Moutos, Thomas, 1992. "A Note on Taxation, Imperfect Competition and the Balanced Budget Multiplier," Oxford Economic Papers, Oxford University Press, vol. 44(1), pages 68-74, January.
    5. Torregrosa, Ramon J., 1998. "On the monotonicity of balanced budget multiplier under imperfect competition," Economics Letters, Elsevier, vol. 59(3), pages 331-335, June.
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