Unit versus ad valorem tax comparisons in a simple New Keynesian dynamic stochastic general equilibrium model

Kazuki Hiraga ()
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Kazuki Hiraga: Tokai University

Eurasian Economic Review, 2019, vol. 9, issue 4, No 2, 459-466

Abstract: Abstract This paper compares unit and ad valorem taxes using a New Keynesian dynamic stochastic general equilibrium model. We show that the ad valorem tax increase is superior to the unit tax increase with respect to the comparative statics, while is equivalent to under the log-linear setting, even when price stickiness and monopolistic competition are present.

Keywords: Unit tax; Ad valorem tax; New Keynesian dynamic stochastic general equilibrium model (search for similar items in EconPapers)
JEL-codes: E62 H20 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s40822-018-0120-6

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