Topic Taxes

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  • Diskussionspapiere 1626 / 2016

    The Macroeconomic Effects of Progressive Taxes and Welfare

    We analyze the positive and normative effects of a progressive tax on wages in a nonlinear New Keynesian DSGE model in the presence of demand and technology shocks. The non-linearity allows us to disentangle the effects of the progressive tax on the volatility and the level of macroeconomic variables, for both intertemporally optimizing (“Ricardian") and non-Ricardian (“rule-of-thumb") households. ...

    2016| Philipp Engler, Wolfgang Strehl
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