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Pré-publication, Document de travail Année : 2018

Time-varying Consumption Tax, Productive Government Spending, and Aggregate Instability

Résumé

In this paper we investigate if government balanced-budget rules together with endogenous taxation may lead to aggregate instability in an endogenous growth framework. After highlighting the differences with the exogenous growth framework, we prove that under counter-cyclical consumption taxes, while there exists a unique balanced growth path, sunspot equilibria based on self-fulfilling expectations occur through a form of global indeterminacy. In addition, we argue that this result is empirically plausible for a large set of OECD countries and that it may also emerge with endogenous income taxes.
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Dates et versions

halshs-01934819, version 1 (26-11-2018)

Identifiants

  • HAL Id : halshs-01934819 , version 1

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Mauro Bambi, Alain Venditti. Time-varying Consumption Tax, Productive Government Spending, and Aggregate Instability. 2018. ⟨halshs-01934819⟩
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