Equilibrium Determinacy in a Two-Tax System with Utility from Government Expenditure
We analyse the relationship between two kinds of tax and equilibrium determinacy in an economy with government expenditure used for utility. We assume that the income tax rate depends on the level of income itself and that the tax rate of consumption is constant. This describes a realistic tax system which resonates in many countries. Our model complements similar extant research, but we extend the literature by theoretically showing that the expansion of policy types can decrease the risk of instability when one condition slightly changes.
|Date of creation:||Sep 2017|
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- Guo, Jang-Ting & Lansing, Kevin J., 1998.
"Indeterminacy and Stabilization Policy,"
Journal of Economic Theory,
Elsevier, vol. 82(2), pages 481-490, October.
- Jang-Ting Guo & Kevin J. Lansing, 1997. "Indeterminacy and stabilization policy," Working Paper 9708, Federal Reserve Bank of Cleveland.
- Chen, Shu-Hua & Guo, Jang-Ting, 2014. "Progressive taxation and macroeconomic (in)stability with utility-generating government spending," Journal of Macroeconomics, Elsevier, vol. 42(C), pages 174-183.
- Jang-Ting Guo & Shu-Hua Chen, 2013. "Progressive Taxation and Macroeconomic (In)stability with Utility-Generating Government Spending," Working Papers 201302, University of California at Riverside, Department of Economics, revised Apr 2013.
- Kamiguchi, Akira & Tamai, Toshiki, 2011. "Can productive government spending be a source of equilibrium indeterminacy?," Economic Modelling, Elsevier, vol. 28(3), pages 1335-1340, May.
- Jang-Ting Guo & Sharon G. Harrison, 2008. "Useful Government Spending and Macroeconomic (In)stability under Balanced-Budget Rules," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(3), pages 383-397, 06.
- Sharon Harrison & Jang-Ting Guo, 2006. "Useful Government Spending and Macroeconomic (In)stability under Balanced-Budget Rules," Working Papers 0701, Barnard College, Department of Economics.
- Takeo Hori & Noritaka Maebayashi, 2013. "Indeterminacy and utility-generating government spending under balanced-budget fiscal policies," Discussion Papers in Economics and Business 13-13, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP). Full references (including those not matched with items on IDEAS)
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