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Automatic stabilizers in the Japanese tax system

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  • Funashima, Yoshito

Abstract

When studying the role of taxes as an automatic stabilizer, excluding the effects of discretionary tax reform is troublesome. A fruitful approach to identifying tax movements over business cycles would be to utilize cyclical information. From this perspective, we exploit wavelets in order to characterize the automatic response of taxes to output at business cycle frequencies in the postwar Japanese economy. We find the presence of automatic stabilizers in the Japanese tax system under the influence of relatively high output volatility but the absence of such stabilizers during the period of the “Great Moderation” in Japan in the 1980s.

Suggested Citation

  • Funashima, Yoshito, 2015. "Automatic stabilizers in the Japanese tax system," Journal of Asian Economics, Elsevier, vol. 39(C), pages 86-93.
    • Handle: RePEc:eee:asieco:v:39:y:2015:i:c:p:86-93
    DOI: 10.1016/j.asieco.2015.06.004
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    Cited by:

    1. Yoshito Funashima, 2018. "Macroeconomic policy coordination between Japanese central and local governments," Empirical Economics, Springer, vol. 54(4), pages 1631-1651, June.
    2. Funashima, Yoshito, 2016. "Governmentally amplified output volatility," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 462(C), pages 469-478.
    3. Funashima, Yoshito, 2017. "Time-varying leads and lags across frequencies using a continuous wavelet transform approach," Economic Modelling, Elsevier, vol. 60(C), pages 24-28.

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    More about this item

    Keywords

    Automatic stabilizer; Output volatility; Business cycle; Wavelet; Japanese tax system;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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