Fiscal devaluation in a small open economy

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11640%2F19%3A00505022" target="_blank" >RIV/00216208:11640/19:00505022 - isvavai.cz</a>
Result on the web
<a href="https://rjmf.econs.online/upload/iblock/64a/RJMF_78-01_ENG_Ambrisko.pdf" target="_blank" >https://rjmf.econs.online/upload/iblock/64a/RJMF_78-01_ENG_Ambrisko.pdf</a>
DOI - Digital Object Identifier
<a href="http://dx.doi.org/10.31477/rjmf.201901.67" target="_blank" >10.31477/rjmf.201901.67</a>

Result language
angličtina
Original language name
Fiscal devaluation in a small open economy
Original language description
Fiscal devaluation, meaning a shift from payroll to indirect taxes, can be beneficial for a small open economy such as the Czech Republic. Using a structural fiscal DSGE model, I show that fiscal devaluation can boost real GDP growth by 0.5 percentage points in the first year, when a budget-neutral tax shift of the magnitude of 1% of GDP occurs from direct taxes to consumption tax. I also calculate fiscal multipliers for several revenue and expenditure categories of the government budget, the largest of which (after the first year) are government consumption (0.6), government investment (0.5), and social security contributions paid by employers (0.4). These results corroborate the hypothesis that the government can easily boost the economy by adjusting fiscal instruments appropriately.
Czech name
—
Czech description
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Project
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Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year
2019
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

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