Tax Reform and Coordination in a Currency Union
We propose a two-country DSGE model to analyze short-term and long-term impact of a modification of consumption and labor tax rate in one country in a currency union. The model embodies the fact that firms differ in their pricing behavior after a VAT tax increase. Due to the common monetary policy, national tax policies have large spill-overs on the rest of the currency union. Furthermore, a fiscal devaluation is different from a nominal devaluation due to the common monetary policy.
|Date of creation:||Oct 2012|
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- Stefan Boeters & Christoph Bohringer & Thiess Buttner & Margit Kraus, 2010.
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- Coenen, Günter & McAdam, Peter & Straub, Roland, 2007.
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Working Paper Series
0747, European Central Bank.
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- Stéphane Gauthier, 2009.
"Un exercice de TVA sociale,"
Economie & Prévision,
La Documentation Française, vol. 0(1), pages 65-81.
- jerome henry & sandro momigliano & pablo hernandez de cos, 2005.
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- Jerome Henry & Pablo Hernandez de Cos & Sandro Momigliano, 2004. "The short-term impact of government budgets on prices; evidence from macroeconometric models," Temi di discussione (Economic working papers) 523, Bank of Italy, Economic Research and International Relations Area.
- Frank Smets & Raf Wouters, 2003.
"An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area,"
Journal of the European Economic Association,
MIT Press, vol. 1(5), pages 1123-1175, 09.
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- Adjemian, S. & Cahn, C. & Devulder, A. & Maggiar, N., 2009.
"Variantes en Univers Incertain,"
236, Banque de France.
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