Munich Personal RePEc Archive

Tariff and Equilibrium Indeterminacy--A Note

Zhang, Yan and Chen, Yan (2008): Tariff and Equilibrium Indeterminacy--A Note.

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Abstract

We explore the equivalence between the factor income taxes (in Schmitt-Grohe and Uribe 1997) in the closed economy and the tariff in the open economy, in the sense that they share similar propagation mechanism of sunspot and fundamental shocks under a balanced-budget rule.

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