Evaluating tax reforms in a monetary economy

Article Abstract:

Revenue-neutral tax reforms in the form of cash-in-advance and non-monetary frameworks were tested in a calibrated endogenous growth model and showed that the frameworks reduced the welfare benefits of lowering the income tax. This is due to the effect of both factors in that aspect of the model wherein money is used to reduce the time-costs of transacting. Favorable tax policies in the shopping time model include decreasing the labor income tax slightly which increases welfare gain due to decrease in transactions. Tax reform policies which take into consideration the superneutrality of money in a consumption or investment scenario would significantly increase the sensitivity of the model in monetary and non-monetary settings.

Tax Law, Public Finance Activities

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The dynamic effects of aggregate demand and supply disturbances in the G7 countries

Article Abstract:

A statistical model developed by Olivier J. Blanchard and Danny Quah is estimated based on post-World War II and pre-World War I data on output and the unemployment rate from the G7 countries. Blanchard and Quah's model decomposes output into permanent and transitory components to identify the effects of aggregate supply and aggregate demand shocks. While the identification seems to be successful, it is limited only to a single country since the model is applied only to US data from the postwar period. Testing the model with different countries and sample periods may provide additional information about macroeconomic structures.

Economic aspects, Supply and demand, Group of 7

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Capital accumulation and taxation in a general equilibrium model with risky human capital

Article Abstract:

Taxation can be used as an instrument in enhancing investments in human capital by increasing precautionary savings when human capital investments are made to respond to earnings. This is due to the effect of income taxation in increasing the insurance effect of taxing uncertain returns, which is the same effect achieved in a conversion to a wage tax base. This increase in savings is due the redistributive component of the income tax structure and the reduction of physical capital accumulation.

Legislative Bodies, Human Resources, Human capital

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