| Description |
1 online resource |
| Series |
IMF working paper ; no. 14/23 |
|
IMF working paper ; no. 14/23.
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| Contents |
Cover; Table of Contents; I. Introduction; II. The Model; A. Steady State; III. Determinacy Analysis; A. Intuitions: a Closer Look at the Labour Market and the Laffer Curve; B.A Numerical Example; Figures; Figure 1. Determinacy Analysis with Labour Tax Only; IV. Policy Analysis; A. Adding Capital Taxes; Figure 2. Determinacy Analysis with Labour and Capital Taxes; B. An Empirical Perspective on the Elasticity of Substitution; C. Balanced-Budget Rules and Determinacy Analysis in the US, EU and UK; Tables; Table 1. 2007 Estimated Tax Rates |
| Summary |
It has been shown that under perfect competition and a Cobb-Douglas production function, a basic real business cycle model may exhibit indeterminacy and sunspot fluctuations when income tax rates are determined by a balanced-budget rule. This paper introduces in an otherwise standard real business cycle model a more general and data coherent class of production functions, namely a constant elasticity of substitution production function. We show that the degree of substitutability between production factors is a key ingredient to understand the (de)stabilising properties of a balanced-budget ru |
| Notes |
Print version record |
| Subject |
International economic relations.
|
|
Microeconomics.
|
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Economics.
|
|
economics.
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Economics
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International economic relations
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Microeconomics
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| Form |
Electronic book
|
| Author |
Rossi, Raffaele, author
|
|
International Monetary Fund, issuing body.
|
| ISBN |
1306477638 |
|
9781306477635 |
|
1475515820 |
|
9781475515824 |
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