Munich Personal RePEc Archive

Oil shocks and the excise duty tax in a DSGE model setting

Lenarčič, Črt (2018): Oil shocks and the excise duty tax in a DSGE model setting. Published in: Zagreb International Review of Economics & Business , Vol. 21, No. 2 (2018): pp. 49-69.

[img]
Preview
PDF
MPRA_paper_109982.pdf

Download (1MB) | Preview

Abstract

This paper sets up a small open economy general equilibrium model operating in a monetary union. Exogenous oil-price shocks affecting the modelled economy are alleviated by introducing a pro-cyclical excise duty tax rule on oil prices. The paper provides a model-based theoretical background for studying a response of fiscal policy that is able to curb the negative effects of volatile global oil prices on inflation. Against this backdrop, we estimate the key parameters of the DSGE model and simulate different responses of the fiscal policy tax rule, based on different values of the responsiveness of the excise duty parameter.

Logo of the University Library LMU Munich
MPRA is a RePEc service hosted by
the University Library LMU Munich in Germany.