Informality and formality: Fiscal policy in DSGE model
We develop a DSGE model of the Colombian economy to assess the effect of tax policy on informal employment and income distribution.The model recreates a small open economy, with persistent income inequality, a substantial degree of informality, and different possibilities of government intervention....
- Autores:
-
Botero, Jesús
Vargas, Christian
Hurtado Rendón, Álvaro Arturo
Franco, Humberto
- Tipo de recurso:
- Fecha de publicación:
- 2014
- Institución:
- Universidad EAFIT
- Repositorio:
- Repositorio EAFIT
- Idioma:
- eng
- OAI Identifier:
- oai:repository.eafit.edu.co:10784/1386
- Acceso en línea:
- http://hdl.handle.net/10784/1386
- Palabra clave:
- Public expenditure
exogenous shock
DSGE
Gasto público
Choque exógeno
DSGE
- Rights
- License
- Acceso abierto
| Summary: | We develop a DSGE model of the Colombian economy to assess the effect of tax policy on informal employment and income distribution.The model recreates a small open economy, with persistent income inequality, a substantial degree of informality, and different possibilities of government intervention. This paper evaluates the consequences of government transfer payments to households with lower incomes. We find that although transfer payments have a positive effect on income distribution, financing them requires an adjustment in government finances (cut spending or increase revenue through the use of various taxes), have negative effects on the economic as a whole. |
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