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Reservations on the classical Laffer curve

Author

Listed:
  • Tchai Tavor

    (The Max Stern Academic College of Emek Yezreel, Israel.)

  • Limor Dina Gonen

    (Ariel University)

  • Uriel Spiegel

    (Bar-Ilan University
    University of Pennsylvania
    Zefat College)

Abstract

Throughout the last two decades, some economists have objected to the conventional shape of one peak point on the Laffer curve. This paper examines the reservations presented in the literature and demonstrates the possibility of a Laffer curve with three peak points. Such a shape may be due to the three heterogeneous population groups of younger workers, adult males, and adult females. These groups respond differently to net wage rate changes, thus reducing the applicability of the changing of tax rates by policymakers.

Suggested Citation

  • Tchai Tavor & Limor Dina Gonen & Uriel Spiegel, 2021. "Reservations on the classical Laffer curve," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 34(4), pages 479-493, December.
    • Handle: RePEc:kap:revaec:v:34:y:2021:i:4:d:10.1007_s11138-019-00483-8
    DOI: 10.1007/s11138-019-00483-8
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    References listed on IDEAS

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