Influential factors responsible for the effect of tax reduction on GDP
Shigeaki Ogibayashi () and
Kosei Takashima
Additional contact information
Shigeaki Ogibayashi: Chiba Institute of Technology
Kosei Takashima: Chiba Institute of Technology
Evolutionary and Institutional Economics Review, 2017, vol. 14, issue 2, No 8, 449 pages
Abstract:
Abstract The factors responsible for the effect of a tax reduction on GDP are analyzed using both agent-based modeling, based on the authors’ previous study, and a derived set of equations for tax reduction multipliers, based on Morishima’s economic linkage table. The findings are that, under the condition of balanced government finance, the tax reduction multiplier is determined by the difference between the increase in demand by consumers or firms as a result of the tax reduction and the decrease in demand by the government. To increase the effect of a tax reduction, it is necessary that the increased disposable income of consumers or firms, as a result of the tax reduction, is more likely to be used for consumption and investment. The analyzed factors that are proved to be indispensable to reproduce positive influence of a tax reduction in ABM are consistent with this mechanism.
Keywords: Agent-based modeling; Tax reduction; Public expenditure (search for similar items in EconPapers)
JEL-codes: C63 E62 H21 H22 H23 H25 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
http://link.springer.com/10.1007/s40844-017-0080-7 Abstract (text/html)
Access to the full text of the articles in this series is restricted.
Related works:
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:spr:eaiere:v:14:y:2017:i:2:d:10.1007_s40844-017-0080-7
Ordering information: This journal article can be ordered from
https://www.springer ... theory/journal/40844
DOI: 10.1007/s40844-017-0080-7
Access Statistics for this article
Evolutionary and Institutional Economics Review is currently edited by Kiichiro Yagi, Yuji Aruka and Takahiro Fujimoto
More articles in Evolutionary and Institutional Economics Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().