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Housing Taxation and Financial Intermediation

Hamed Ghiaie and Jean-François Rouillard ()
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Hamed Ghiaie: Département d'économique, Université de Cergy-Pontoise

Cahiers de recherche from Departement d'Economique de l'École de gestion à l'Université de Sherbrooke

Abstract: Through the lens of a multi-agent dynamic general equilibrium model, we examine the effects of four permanent changes in housing taxes and deductions on macroeconomic aggregates and welfare. Our main result is that the presence of borrowing-constrained bankers dampen the negative consequences of housing taxation on output. The long-run tax multipliers found range from -1.02 to -0.6. The reduction in the deduction of mortgage interest payments delivers the lowest multiplier. We also implement revenue-neutral tax reforms and find that the repeal of mortgage deductibility is the only policy that generates gains in output.

Keywords: Housing taxation; banking; dynamic general equilibrium. (search for similar items in EconPapers)
JEL-codes: E62 G28 H24 R38 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2018-01, Revised 2018-11
New Economics Papers: this item is included in nep-dge, nep-knm, nep-mac, nep-pbe and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:shr:wpaper:18-01

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