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Assessment of the tax and transfer changes in Hungary between 2010 and 2017 using a microsimulation model

Mihály Szoboszlai (), Zoltán Bögöthy (), Pálma Mosberger () and Dávid Berta
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Mihály Szoboszlai: Magyar Nemzeti Bank (Central Bank of Hungary)
Zoltán Bögöthy: Magyar Nemzeti Bank (Central Bank of Hungary)
Pálma Mosberger: Magyar Nemzeti Bank (Central Bank of Hungary)

No 2018/135, MNB Occasional Papers from Magyar Nemzeti Bank (Central Bank of Hungary)

Abstract: In this study, we analyse the immediate budgetary and the long-term macroeconomic and fiscal effects of measures concerning taxes, contributions and transfers in the period between 2010 and 2017 with a microsimulation model. The corresponding tool is an updated and extended version of the behavioural general equilibrium microsimulation model developed by the Magyar Nemzeti Bank. Among the relevant fiscal policy measures, we primarily took into account the changes in labour taxes, the main elements of the transformation of social benefits and indirectly several other tax changes (on sales, capital and consumption taxes) over the period between 2010 and 2017. Our results suggest that the policy measures examined might contribute to Hungarian GDP growth by nearly 6 percent with a labour supply growth exceeding 6 percent from 2010 onward. The measures have a positive effect on the general government balance, improving the fiscal position over the long run by more than HUF 200 billion. The effects of the statutory changes are evaluated separately and cumulatively. The results of the study might be significantly influenced by the calibrated parameter values in the macromodel that is linked to the microsimulation.

Keywords: behavioural microsimulation; micro macro model; taxation; transfers; tax reform (search for similar items in EconPapers)
JEL-codes: C54 E62 H22 H31 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2018
New Economics Papers: this item is included in nep-cmp, nep-eur and nep-mac
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Handle: RePEc:mnb:opaper:2018/135