Balanced budget multiplier with indirect taxes under imperfect competition

Ramon Torregrosa

Estudios Económicos, 2003, vol. 18, issue 1, 3-13

Abstract: This paper presents two counter-examples to the Keynesian features attributed to imperfect competition in general equilibrium models. In particular, by considering indirect tax rates, a non positive and monotonically non-increasing relationship between the magnitude of both the balanced budget and welfare multipliers and market-power is obtained.

Date: 2003
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