Taxes and Inflation.
Abstract
This paper contains the results of a preliminary investigation into the role that taxes may have played in the inflationary process of the past two decades. Such an analysis seems timely, because the proportion of GNP devoted to taxes has been rising fairly steadily since 1950. Moreover, not much attention has been paid in the literature to taxes in the possible role as causes of inflationary pressures. In recent macroeconomic textbooks, taxes have been analyzed in a predominantly Keynesian framework, in which taxes are determinants of aggregate demand. Accordingly, increases in taxes lead to reductions in aggregate demand and, hence, their impact tends to be deflationary. But aggregate supply remains completely unaffected by changes in taxes.
Document Details
- Document Type
- Technical Report
- Publication Date
- Sep 01, 1979
- Accession Number
- ADA081194
Entities
People
- Frank Brechling
- Kathy Classen Utgoff