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A Progressive Consumption Tax - an Important Instrument for Stabilizing Business Cycles, or just an Exotic Idea?

Aleksandar Vasilev

Bulgarian Economic Papers from Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria // Center for Economic Theories and Policies at Sofia University St Kliment Ohridski

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 of progressive taxation of consumption expenditures for the stabilization of cyclical uctuations 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; Bulgaria (search for similar items in EconPapers)
JEL-codes: E24 E32 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2018-12, Revised 2018-12
New Economics Papers: this item is included in nep-bec, nep-dge, nep-mac, nep-pbe, nep-pub and nep-tra
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https://www.uni-sofia.bg/index.php/eng/content/dow ... file/BEP-2018-12.pdf First version, 2018 (application/pdf)

Related works:
Journal Article: A progressive consumption tax: an important instrument for stabilizing business cycles, or just an exotic idea? (2019) Downloads
Working Paper: A progressive consumption tax: an important instrument for stabilizing business cycles, or just an exotic idea? (2018) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:sko:wpaper:bep-2018-12

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