Monetary Policy and Automatic Stabilizers: The Role of Progressive Taxation

Material TypeArticleLanguageEnglish
TitleMonetary Policy and Automatic Stabilizers: The Role of Progressive Taxation Author(S)FABRIZIO MATTESINI (Author)
Abstract  progressive taxation, automatic stabilizers, macroeconomic volatility, optimal monetary policy We study the effects of progressive labor income taxation in an otherwise standard New Keynesian (NK) model. We show that progressive taxation (i) introduces a trade-off between output and inflation stabilization and affects the slope of the Phillips Curve, (ii) acts as automatic stabilizer changing the responses to technology shocks and demand shocks ...Paginationp825–862
SubjectEconomicsDescriptorsEconomics
Journal TitleJournal of Money, Credit, and Banking  
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