Lancastre, Manuel (2017): Redistributive Tax Policy at the Zero Bound.
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Abstract
Generating consumer price inflation with an increasing path of consumption taxes when the nominal interest rate zero lower bond is binding and monetary policy becomes ineffective, as proposed by Correia et al. [1], may not neutralize a liquidity trap when liquidity is constrained. Instead, this paper shows that a redistributive tax policy may counteract a zero bound recession in liquidity constrained economies with no need to increase public spending and debt, with a fiscal prescription curiously opposite to the one proposed by Correia et al. [1].
Item Type: | MPRA Paper |
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Original Title: | Redistributive Tax Policy at the Zero Bound |
English Title: | Redistributive Tax Policy at the Zero Bound |
Language: | English |
Keywords: | Zero Bound; Fiscal policy; Credit constraints; Sticky prices; Heterogeneous agents; Redistribution |
Subjects: | E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E21 - Consumption ; Saving ; Wealth E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E40 - General E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E43 - Interest Rates: Determination, Term Structure, and Effects E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E62 - Fiscal Policy |
Item ID: | 98947 |
Depositing User: | Manuel Lancastre |
Date Deposited: | 12 Mar 2020 01:42 |
Last Modified: | 02 Dec 2024 18:52 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/98947 |