A DSGE Model to Evaluate the Macroeconomic Impacts of Taxation

REM Working Paper 062-2018

23 Pages Posted: 19 Dec 2018

See all articles by José Alves

José Alves

University of Lisbon; ISEG Lisbon School of Economics and Management,Universidade de Lisboa; REM - Resarch in Economics and Mathematics

Date Written: November 30, 2018

Abstract

As recognized, taxation is not only an instrument for government to collect revenues from the economic agents but also an instrument of fiscal policy to influence the agents’ behaviour. In this work, we develop a DSGE model to assess the macroeconomic impact of three tax items (taxes on individual income, on firms’ income and on consumption) on the dynamics of both individual tax items and on the aggregate revenues as well. Moreover, we also intend to evaluate how macroeconomic aggregates behave in a presence of stochastic shocks in taxation.

Keywords: DSGE Models; Tax Effects; Fiscal Policy; Optimal Taxation

JEL Classification: D58; E62; H21; H30

Suggested Citation

Alves, José, A DSGE Model to Evaluate the Macroeconomic Impacts of Taxation (November 30, 2018). REM Working Paper 062-2018, Available at SSRN: https://ssrn.com/abstract=3293899 or http://dx.doi.org/10.2139/ssrn.3293899

José Alves (Contact Author)

University of Lisbon ( email )

R. Branca Edmée Marques
Dept. Plant Biology
Lisboa, 1600-276
Portugal

ISEG Lisbon School of Economics and Management,Universidade de Lisboa ( email )

REM - Resarch in Economics and Mathematics ( email )

ISEG Universidade de Lisboa
Rua Miguel Lupi 20
Lisboa, 1249-078
Portugal

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