Destabilizing balanced-budget consumption taxes in multi-sector economies - Archive ouverte HAL Access content directly
Journal Articles International Journal of Economic Theory Year : 2013

Destabilizing balanced-budget consumption taxes in multi-sector economies

(1) , (2, 3) , (2) , (2, 4)
1
2
3
4

Abstract

We examine the impact of balanced-budget consumption taxes on the existence of expectations-driven business cycles in two-sector economies with infinitely-lived households. We prove that, whatever the relative capital intensity difference across sectors, aggregate instability can occur if the consumption tax rate is not too low. Moreover, we show through a numerical exercise based on empirically plausible tax rates that endogenous business-cycle fluctuations may be a source of instability for all OECD countries, including the US.

Dates and versions

hal-01500876 , version 1 (03-04-2017)

Identifiers

Cite

Kazuo Nishimura, Carine Nourry, Thomas Seegmuller, Alain Venditti. Destabilizing balanced-budget consumption taxes in multi-sector economies. International Journal of Economic Theory, 2013, 9 (1), pp.113-130. ⟨10.1111/j.1742-7363.2013.12008.x⟩. ⟨hal-01500876⟩
102 View
0 Download

Altmetric

Share

Gmail Facebook Twitter LinkedIn More