Do tax distortions lead to more indeterminacy? A New Keynesian perspective

Giovanni Di Bartolomeo () and Marco Manzo

No 13, CIMEO, Sapienza University of Rome from Department of Economics and Law, Sapienza University of Rome

Abstract: Following the recent developments of the literature on stabilization policies, this paper investigates the effect of tax distortions on equilibrium determinacy in a New Keynesian economy with rule-of-thumb consumers and capital accumulation. In particular, we focus on the inter-action between monetary policy and tax distortions in supporting the saddle-path equilibrium under the assumptions of balanced budget and monetary policy satisfying a Taylor rule.

Keywords: rule-of-thumb consumers; equilibrium determinacy; fiscal and monetary policy inter-actions; and tax distortions (search for similar items in EconPapers)
Date: 2007-05
New Economics Papers: this item is included in nep-cba, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.dipecodir.it/wpcom/data/wp_no_13_2007.pdf (application/pdf)

Related works:
Working Paper: Do tax distortions lead to more indeterminacy? A New Keynesian perspective (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ter:wpaper:0013

Access Statistics for this paper

More papers in CIMEO, Sapienza University of Rome from Department of Economics and Law, Sapienza University of Rome
Bibliographic data for series maintained by Giovanni Di Bartolomeo ().