Tax Reforms in an Open-Economy DSGE Model for France
Coupet, Maylis
Tax Reforms in an Open-Economy DSGE Model for France - 2008.
9
This paper presents a dynamic stochastic general equilibrium (DSGE)model of the French economy in the euro zone.The model is partly estimated with Bayesian techniques for nominal and real rigidity parameters. It seeks to assess the impact of tax reforms on the French economy, allowing for the economy’s interactions with the rest of the world. As an illustration, we analyze the macroeconomic impact of a “social VAT” measure consisting of a decrease in social contributions equal to 1% of market-sector GDP, wholly funded by a rise in VAT rates. Simulations suggest that such a measure would be expansionary in the short run: hours worked would rise 0.5 points within a year, GDPwould gain 0.4 points, and the trade balance would improve by 0.2 points of GDP. In the long run, however, the positive employment effect would fade and the measure would result in a slight fall in activity,with market-sector GDPlosing about 0.1 points with respect to the baseline scenario.
Tax Reforms in an Open-Economy DSGE Model for France - 2008.
9
This paper presents a dynamic stochastic general equilibrium (DSGE)model of the French economy in the euro zone.The model is partly estimated with Bayesian techniques for nominal and real rigidity parameters. It seeks to assess the impact of tax reforms on the French economy, allowing for the economy’s interactions with the rest of the world. As an illustration, we analyze the macroeconomic impact of a “social VAT” measure consisting of a decrease in social contributions equal to 1% of market-sector GDP, wholly funded by a rise in VAT rates. Simulations suggest that such a measure would be expansionary in the short run: hours worked would rise 0.5 points within a year, GDPwould gain 0.4 points, and the trade balance would improve by 0.2 points of GDP. In the long run, however, the positive employment effect would fade and the measure would result in a slight fall in activity,with market-sector GDPlosing about 0.1 points with respect to the baseline scenario.
Réseaux sociaux