The effect of the consumption tax on economic growth and welfare with money and endogenous fertility

Akihiko Kaneko, Daisuke Matsuzaki

Research output: Contribution to journalArticle

Abstract

In this study, we examine the effect of consumption tax on the growth rate and welfare in a model with money and endogenous fertility. First, we show that an increase in consumption tax always reduces the economic growth rate but has an ambiguous effect on welfare. We show a numerical example based on Japanese data and demonstrate the likelihood that increasing the consumption tax decreases welfare. We also compare the effects of consumption tax financing and monetary financing on growth rate and welfare.

Original languageEnglish
Pages (from-to)355-375
Number of pages21
JournalSeoul Journal of Economics
Volume31
Issue number4
Publication statusPublished - 2018 Jan 1

Keywords

  • Consumption tax
  • Endogenous fertility
  • Endogenous growth
  • Money-in-the-utility-function model

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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