Preprint
Progressive taxation and (in)stability in an exogenous growth model with non-market ("home") production
We show that in a exogenous growth model with non-market ("home") sector calibrated to Bulgarian data under the progressive taxation regime (1993-2007), the economy exhibits equilibrium indeterminacy due to the presence of non-market production. These results are in line with the findings in Benhabib and Farmer (1994, 1996) and Farmer (1999). Also, the findings in this paper are in contrast to Guo and Lansing (1988) who argue that progressive taxation works as an automatic stabilizer. Under the flat tax regime (2008-16), the economy calibrated to Bulgarian data displays saddle-path stability. The decrease in the average effective tax rate addresses the indeterminacy issue and eliminates the "stable focus" dynamics.
- Language
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Englisch
- Classification
-
Wirtschaft
One, Two, and Multisector Growth Models
Informal Labor Markets
- Subject
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Progressive taxation
Non-market sector
Home production
Equilibrium (In)determinacy
- Event
-
Geistige Schöpfung
- (who)
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Vasilev, Aleksandar
- Event
-
Veröffentlichung
- (who)
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
- (where)
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Kiel und Hamburg
- (when)
-
2018
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Preprint
Associated
- Vasilev, Aleksandar
- ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften, Leibniz-Informationszentrum Wirtschaft
Time of origin
- 2018
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The welfare effect of flat income tax reform: the case of Bulgaria
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Aggregation with a mix of indivisible and continuous labor supply decisions: the case of home production
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