The Role of Taxes as Automatic Destabilizers in New Keynesian Economics

Claus Thustrup Hansen and Henrik Jacobsen Kleven
Authors registered in the RePEc Author Service: Claus Thustrup Kreiner

No 399, CESifo Working Paper Series from CESifo

Abstract: This paper analyses the effects of taxation in New Keynesian economics. The results show that taxes contribute to price and wage stickiness and, moreover, that the resulting fluctuations in welfare are magnified by the presence of taxes. These results are at odds with the old Keynesian idea of automatic stabilizers.

Keywords: New Keynesian economics; taxation; automatic stabilizers; JEL Classification: E32; E62 (search for similar items in EconPapers)
Date: 2000
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Related works:
Journal Article: The role of taxes as automatic destabilizers in New Keynesian economics (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_399

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