Progressive taxation and (in)stability in an endogenous growth model with human capital accumulation

Vasilev, Aleksandar

Progressive taxation and (in)stability in an endogenous growth model with human capital accumulation

EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels

Abstract: We show that in an endogenous growth model with human accumulation calibrated to Bulgarian data under the progressive taxation regime (1993-2007), the artificial economy exhibits equilibrium indeterminacy. These results are in line with the recent findings in Chen and Guo (2015) in the context of an AK endogenous growth model. Also, the findings are in contrast to Guo and Lansing (1988) who argue that progressive taxation works as an automatic stabilizer. Progressive taxation in our setup leads to equilibrium indeterminacy. This indeterminacy result could explain, at least partially, why the economic performance under the progressive taxation regime in Bulgaria was not impressive.

Keywords: Progressive Income Taxation; Endogenous growth; Human capital; Equilibrium (In)determinacy. (search for similar items in EconPapers)
JEL-codes: E32 E62 O41 (search for similar items in EconPapers)
Date: 2016-07-18
New Economics Papers: this item is included in nep-gro, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://www.eeri.eu/documents/wp/EERI_RP_2016_18.pdf (application/pdf)

Related works:
Journal Article: Progressive taxation and (in)stability in an endogenous growth model with human capital accumulation (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eei:rpaper:eeri_rp_2016_18

Access Statistics for this paper

More papers in EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels Contact information at EDIRC.
Bibliographic data for series maintained by Julia van Hove ().