IDEAS home Printed from https://ideas.repec.org/a/bpj/bejmac/v23y2023i2p845-884n7.html
   My bibliography  Save this article

Progressive Taxation and Robust Monetary Policy

Author

Listed:
  • Hiraga Kazuki

    (Graduate School of Economics, Nagoya City University, Nagoya, Japan)

  • Hasui Kohei

    (Faculty of Economics, Aichi University, Nagoya, Japan)

Abstract

Recent monetary policy analyses show the profound implications of progressive taxation for monetary policy. This paper investigates how progressive taxation on labor income changes the effect of model uncertainty by introducing robust control. We obtained the following results: (i) Higher progressive taxation decreases the effect of model uncertainty on the inflation rate, output gap, and interest rate. (ii) A sufficiently higher progressive taxation brings the economy into the determinate equilibrium even if the model uncertainty is strong. According to these results, we conclude that progressive taxation on labor income is effective in mitigating the effects of model uncertainty in terms of variance and equilibrium determinacy.

Suggested Citation

  • Hiraga Kazuki & Hasui Kohei, 2023. "Progressive Taxation and Robust Monetary Policy," The B.E. Journal of Macroeconomics, De Gruyter, vol. 23(2), pages 845-884, June.
    • Handle: RePEc:bpj:bejmac:v:23:y:2023:i:2:p:845-884:n:7
    DOI: 10.1515/bejm-2021-0251
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/bejm-2021-0251
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/bejm-2021-0251?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kirill Anikeev & Vadim Grishchenko, 2023. "Russian Real Economy and Financial Sector Under the Structural Transformation: Review of the Bank of Russia, NES, and HSE University Workshop," Russian Journal of Money and Finance, Bank of Russia, vol. 82(4), pages 126-144, December.

    More about this item

    Keywords

    monetary policy; progressive taxation; robust policy;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:bejmac:v:23:y:2023:i:2:p:845-884:n:7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.