Tax Rates Impact on GDP in Poland
DOI:
https://doi.org/10.12775/EQUIL.2012.017Keywords:
taxes, fiscal policyAbstract
In the article tax rates impact on GDP in Poland is analyzed. The analysis is based on dynamic stochastic general equilibrium model (DSGE model). Impulse-response analysis shows that the increase in income tax rate causes the decrease in capital, labour and production. Moreover, capital is partially replaced by consumption, because households minimize consumption fluctuations. The comparison of the effects of increasing taxation of the capital and labour shows that the impact on economy is stronger in case of wage taxes. Consumption taxes, by negative wealth effect, decrease after-tax consumption and capital, but on the other hand, increase labour and production. The direction of impact of consumption taxes on production is in this case opposite than in demand models.
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References
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Kolasa M. (2008), Structural heterogeneity or asymmetric shocks? Poland and the euro area through the lens of a two-country DSGE model, The National Bank of Poland, The Department of Social Communication, Warsaw.
Kuchta Z. , K. Piłat (2010), Zastosowanie modelu realnego cyklu koniunkturalnego Hansena dla gospodarki Polski, Gospodarka Narodowa nr 11-12.
Kydland F. E., E. C. Prescott (1982), Time to Build and Aggregate Fluctuations, Econometrica Vol. 50, Issue 6.
Ljungqvist L., T. J. Sargent (2004), Recursive macroeconomic theory, MIT Press, Cambridge.
McGrattan (1994), The Macroeconomic Effects of Distortionary Taxation, Journal of Monetary Economics, 33.
Mc Morrow K., W. Roger (2001), Potential Output: Measurement Methods, ?New? Economy Influences and Scenarios for 2001-2010 ? A comparison of the EU15 and the US, European Communities, Economic Papers, No. 150.
Plosser Ch. I. (1989), Understanding Real Business Cycles, Journal of Economic Perspectives, nr 3.
Snowdon B., H. Vane, P. Wynarczyk (1998), Współczesne nurty teorii makroekonomii, State Scientific Publishers PWN, Warsaw.
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