Publicação
The Impact of Labor Income Tax Progressivity on the Fiscal Multipliers in the Context of the Fiscal Consolidation
| Resumo: | Fiscal multipliers depend on several structural characteristics of each economy. In this study it is argued that labor income tax progressivity lowers the fiscal multipliers of fiscal consolidation programs. By calibrating an incomplete‘ markets, overlapping generations model for the United States for different values of the labor income tax progressivity, it is shown that as progressivity increases the recessionary impacts of fiscal consolidation are lower in the case of consolidation through decrease of government spending and are more recessionary in the case of consolidation financed with tax hikes. |
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| Autores principais: | Santos, Mariana |
| Assunto: | Fiscal multipliers labor income tax progressivity government spending taxation consolidação orçamental multiplicadores orçamentais progressividade fiscal sobre os rendimentos do trabalho |
| Ano: | 2020 |
| País: | Portugal |
| Tipo de documento: | artigo |
| Tipo de acesso: | unknown |
| Instituição associada: | Imprensa da Universidade de Coimbra |
| Idioma: | inglês |
| Origem: | Notas Económicas |
| Resumo: | Fiscal multipliers depend on several structural characteristics of each economy. In this study it is argued that labor income tax progressivity lowers the fiscal multipliers of fiscal consolidation programs. By calibrating an incomplete‘ markets, overlapping generations model for the United States for different values of the labor income tax progressivity, it is shown that as progressivity increases the recessionary impacts of fiscal consolidation are lower in the case of consolidation through decrease of government spending and are more recessionary in the case of consolidation financed with tax hikes. |
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