Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/277379 
Authors: 
Year of Publication: 
2017
Citation: 
[Journal:] European Journal of Economics and Economic Policies: Intervention (EJEEP) [ISSN:] 2052-7772 [Volume:] 14 [Issue:] 1 [Year:] 2017 [Pages:] 48-69
Publisher: 
Edward Elgar Publishing, Cheltenham
Abstract: 
The Keynesian stability condition is a necessary assumption for the IS equilibrium concept to make economic sense. With reasonable values for the saving parameter(s), however, it typically implies excessively strong multiplier effects. This is more than a cosmetic issue, not least because any simulation study of an otherwise ambitious model will thus be fraught with severe problems along some of its dimensions. The present paper demonstrates that by introducing proportional tax rates on production, corporate income and personal income, the multipliers will be considerably dampened. Within an elementary Kaleckian framework, it also advances a fairly satisfactory numerical calibration.
Subjects: 
investment multiplier
proportional taxes
public debt
functional finance
moment matching
JEL: 
C02
D84
E12
E30
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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