Balanced Budget Multiplier with Indirect Taxes Under Imperfect Competition
ISSN: 0186-7202
Year of publication: 2003
Volume: 18
Issue: 1
Pages: 3-13
Type: Article
More publications in: Estudios económicos
Abstract
This paper presents two counter-examples to the Keynesian features attributed to imperfect competition in general equilibrium models. In particular, by considering indirect tax rates, a non possitive and monotonically non-increasing relationship between the magnitude of both the balanced budget and welfare multipliers and market-power is obtained.