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Thursday, August 6, 2020 | History

2 edition of note on taxation, imperfect competition and the balanced budget multiplier found in the catalog.

note on taxation, imperfect competition and the balanced budget multiplier

Hassan Molana

note on taxation, imperfect competition and the balanced budget multiplier

by Hassan Molana

  • 64 Want to read
  • 32 Currently reading

Published by Department of Economics, University of Stirling in Stirling .
Written in English

    Subjects:
  • Competition, Imperfect -- Mathematical models.,
  • Taxation -- Mathematical models.

  • Edition Notes

    StatementHassan Molana and Thomas Moutos.
    SeriesDiscussion paper in economics / Department of Economics, University of Stirling -- 91 / 4, Discussion paper in economics (University of Stirling. Department of Economics) -- 91/4.
    ContributionsMoutos, Thomas., University of Stirling. Department of Economics.
    The Physical Object
    Pagination10, [1] p. ;
    Number of Pages10
    ID Numbers
    Open LibraryOL19212272M

    1 Balanced Budget Multipliers for Small Open Regions within a Federal System: Evidence from the Scottish Variable Rate of Income Tax* by Patrizio Leccaa Peter G. McGregora J. Kim Swalesa Ya Ping Yinb a Fraser of Allander Institute, Department of Economics, University of Strathclyde, the Strathclyde International Public Policy Institute and the Scottish Centre for Constitutional. Economics For Business can be studied as a single subject or as part of one of our Professional Qualifications. Visit our website to learn more about this and our other qualifications.

      The latter two are the balanced budget. And, yes, national income rises no more than taxes. It is indeed the case that after-tax producer income is wholly unchanged (ΔY – ΔT = 0); the nonzero multiplier arises in that ΔG has been apparently funded “for free”, without reducing after-tax producer income: ΔY = ΔG.   Recently, New Keynesian economists (NKE) have been concerned with the effect of imperfect competition on the sign and size of the balanced-budget fiscal multiplier. This literature all came up with models based on a profit–income relationship in which imperfect competition increases the tax-financed fiscal multiplier. Accordingly, the higher the exercise of market power by firms, the .

      Existing studies on the fiscal multiplier under imperfect competition assume a symmetric market structure with identical firms. This paper examines the fiscal policy implications of introducing a multisectoral economy, where a composite commodity is offered in many varieties within a market of monopolistic competition and a homogeneous good is produced in a perfectly competitive . Below you will find a 20 question flash review game covering Marginal Propensity to Consume, Marginal Propensity to Save, the Spending Multiplier, Tax Multiplier, and Balanced Budget Multiplier. It has explanations for every question so you know where you went wrong. To review this content head to the Propensities and Multipliers Review Page.


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Note on taxation, imperfect competition and the balanced budget multiplier by Hassan Molana Download PDF EPUB FB2

Torregrosa, Ramon J., "On the monotonicity of balanced budget multiplier under imperfect competition," Economics Letters, Elsevier, vol. 59(3), pagesJune. Emmanuelle Taugourdeau, "Imperfect Competition and Fiscal Policy Transmission in a Two-Country Economy," Open Economies Review, Springer, vol.

13(1), pagesJanuary. Hassan Molana, Thomas Moutos; A NOTE ON TAXATION, IMPERFECT COMPETITION AND THE BALANCED BUDGET MULTIPLIER *, Oxford Economic Papers, Vol Issue 1, 1 Ja We use cookies to enhance your experience on our continuing to use our website, you are agreeing to our use of by: A Imperfect competition and the balanced budget multiplier book on Taxation, Imperfect Competition and the Balanced Budget Multiplier.

By Hassan Molana and Thomas Moutos. Abstract. This paper explores the implications of the form of taxation for the size of the balanced budget multiplier in imperfectly competitive models.

The authors show that the balanced budget multiplier is positive but less than Author: Hassan Molana and Thomas Moutos. A Note on Taxation, Imperfect Competition and the Balanced Budget Multiplier, ().

A Simple Model of Imperfect Competition with Walrasian Features, (). Imperfect Competition and the Keynesian Cross", Author: Ramón J.

Torregrosa Montaner. In these examples the balanced budget multiplier rises monotonically in respect to market power. The question this paper seeks to answer is whether this monotonic behavior of the balanced budget multiplier remains unchanged under distortionary tax schemes. H Molana, T MoutosA note on taxation, imperfect competition and the balanced budget Cited by: Torregrosa () shows these results as counter-examples of positive balanced budget multipliers in imperfect competition general equilibrium models.

8 There is no contradiction with the partial. Imperfect Competition and the Keynesian Cross (No. ).National Bureau of Economic Research, Inc.

Molana, H., & Moutos, T. A note on taxation, imperfect competition and the balanced budget multiplier. Molana, H. and T. Moutos,A note on taxation, imperfect competition and the balanced budget multiplier, Oxford Economic Pap Startz, R.,Monopolistic competition as a foundation for Keynesian macroeconomic models, Quarterly Journal.

We build an N.K. model with imperfectly competitive goods markets and heterogeneous individuals and examine their impact on fiscal multipliers and on the net increase in output and expenditure caused by fiscal policies, using the balanced budget multiplier.

Results show that in highly unequal economies the maximum net increase in output and expenditure comes when governments increase. This paper shows that the labour intensity of home production of a final consumption good affects national income and income multiplier effects of public expenditure financed by taxation.

A reduction in labour intensity increases the level of national income but decreases the magnitude of the balanced budget multiplier effect. This result holds whether the tax instrument is distortionary or. Recently, New Keynesian economists (NKE) have been concerned with the effect of imperfect competition on the sign and size of the balanced-budget fiscal multiplier.

This literature all came up with models based on a profit–income relationship in which imperfect competition increases the tax-financed fiscal multiplier. We study an indirect tax reform in a general equilibrium model with imperfect competition for both the Cournot and the Free entry equilibria.

We show that it is possible to attain a positive balanced budget multiplier by means of a substitution of specific by ad valorem taxation.

Moreover, although any tax substitution causes higher prices and the flow up of firms in the long-run, the Free. Molana, H. and T. Moutos (), “A Note on Taxation, Imperfect Competition and the Balanced Budget Multiplier,” Oxford Economic Papers– Google Scholar Rotemberg, J. and M.

Woodfond (), “Dynamic General Equilibrium Models with Imperfectly Competitive Product Markets,” in: T. Cooley (ed.), Frontiers of Business Cycle.

Elsevier, Amsterdam Consumption taxes in monopolistic competition Delipalla S, Keen M () The comparison between ad-valorem and specific taxation under imperfect competition. J Public Econ 49(3. 'A Note on Taxation, Imperfect Competition, and the Balanced-Budget Multiplier', Oxford Economic Papers, 44, Startz, R.

'Monopolistic Competition as a Foundation for Keynesian Macroeconomic Models', Quarterly Journal of Economics, AN INDIRECT TAXATION REFORM UNDER IMPERFECT COMPETITION Autor: Ramón J. Torregrosa (*) Universidad de Salamanca P. 9/05 as well as those rates which generate positive (negative) balanced budget multiplier.

Furthermore, the model captures the impact of the tax reform on Note that due to the symmetry of the model p i(t,s). The balanced budget multiplier implies that if the government increases spending and taxation by the same amount, then equilibrium national income (GDP) rises by this amount.

This balanced budget stimulation is possible, according to Keynes, because when the government receives $1, it spends it all. On the other hand, when private citizens receive $1, they spend only a fraction of it.

Fiscal Policy – Neutral and compensatory and functional finance; balanced budget multiplier. International Economics. Theories of International Trade: Empirical verification and Relevance International Trade under Imperfect competition Terms of Trade and Economic Growth – Secular Deterioration of Terms of Trade Hypothesis – a critical.

Due to the difference between the spending and tax multipliers, it is possible for the government to change GDP without increasing or decreasing the deficit. The balanced budget multiplier is always 1.

Increasing taxes to pay for a spending increase of an equal amount will increase GDP by a factor of 1. However, recent work on imperfect competition and taxation makes the surprising claim that the presence of imperfect competition strengthens the case against capital income taxation.

In fact, the optimal tax on capital may well be negative in an imperfectly competitive economy. Even if a fully optimal tax policy is impractical to im. Denote by the time-Lagrange multiplier on the flow budget constraint. Note again that capital taxation is net of depreciation.

Nash Bargaining.Capital Income Taxation with Imperfect Competition, American Economic Review, 92, Krause, Michael U. and Thomas A. Lubik,The (Ir)relevance of Real Wage Rigidity in the.In this lesson summary we cover the key takeaways and terminology related to spending multipliers and tax multipliers.

Topics include how to calculate the expenditure multiplier and the tax multiplier. Fiscal Policy-Neutral and compensatory and functional finance; balanced budget multiplier 5.

International Economics Theories of International Trade: Empirical verification and Relevance International Trade under Imperfect competition Terms of Trade and Economic Growth-Secular Deterioration of Terms of Trade hypothesis-a critical review.