Fiscal Policy as a Determinant of Consumption Expenditure: The Estonian Case
The aim of the paper is to analyze and explain the impacts of fiscal policy on householdsÃ 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 householdsÃ income and expenditures as well as on time-series analysis of aggregated data of GDP, consumption and income tax.
|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).|
|Contact details of provider:|| Postal: |
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Web page: http://majandus.ttu.ee
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