Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/179397
Authors: 
Vasilev, Aleksandar
Year of Publication: 
2016
Series/Report no.: 
EERI Research Paper Series 18/2016
Abstract: 
We show that in an endogenous growth model with human accumulation calibrated to Bulgarian data under the progressive taxation regime (1993-2007), the artificial economy exhibits equilibrium indeterminacy. These results are in line with the recent findings in Chen and Guo (2015) in the context of an AK endogenous growth model. Also, the findings are in contrast to Guo and Lansing (1988) who argue that progressive taxation works as an automatic stabilizer. Progressive taxation in our setup leads to equilibrium indeterminacy. This indeterminacy result could explain, at least partially, why the economic performance under the progressive taxation regime in Bulgaria was not impressive.
Subjects: 
Progressive Income Taxation
Endogenous growth
Human capital
Equilibrium (In)determinacy
JEL: 
E32
E62
O41
Document Type: 
Working Paper
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