A Progressive Consumption Tax: An Important Instrument for Stabilizing Business Cycles, or Just an Exotic Idea?

Aleksandar Vasilev

EconStor Open Access Articles and Book Chapters, 2022, vol. 63, issue 10-12, 576-588

Abstract: We introduce progressive consumption taxation into a real-business-cycle setup augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999–2016). We investigate the quantitative importance of the presence of progressive taxation of consumption expenditures for the stabilization of cyclical fluctuations in Bulgaria. We find the quantitative effect of such a tax to be very small, and thus not important for either business cycle stabilization or public finance issues.

Keywords: business cycles; progressive consumption taxation (search for similar items in EconPapers)
JEL-codes: E24 E32 (search for similar items in EconPapers)
Date: 2022
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https://www.econstor.eu/bitstream/10419/273312/1/progr_sales_tax_2018.pdf (application/pdf)

Related works:
Journal Article: A progressive consumption tax: an important instrument for stabilizing business cycles, or just an exotic idea? (2019)
Working Paper: A Progressive Consumption Tax - an Important Instrument for Stabilizing Business Cycles, or just an Exotic Idea? (2018)
Working Paper: A progressive consumption tax: an important instrument for stabilizing business cycles, or just an exotic idea? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:espost:273312

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