Affiliation:
1. American University of Athens, 15232 Athens, Greece
Abstract
Abstract
This short article underlines the efficiency considerations reflected by a Laffer curve. In a static context in which inflation is assumed away, the Laffer curve describes what would the response of tax revenue to tax rate change be under increasing inflation if there were allocative efficiency, i. e. given perfect competition and full-employment output. The link between market structure and state of economic activity thus emerges as a critical determinant of the shape of Laffer curve. Under imperfect competition, the entire Laffer curve would reflect how the business “leadership” having emanated from the prevailing market structure, uses taxation as a means of higher profit earning capacity.
Subject
General Economics, Econometrics and Finance
Reference16 articles.
1. Bajada, C. and F. Schneider, eds. (2005): Size, Causes and Consequences of the Underground Economy. Ashgate Publishing, Aldershot, England.
2. Benassi, C., R. Cellini and A. Chirco (2002): Personal Income Distribution and Market Structure, German Economic Review 3(3), 327–338.
3. Carlstrom, C. T. and T. S. Fuerst (2008): Explaining Apparent Changes in the Phillips Curve: The Great Moderation and Monetary Policy, Federal Reserve Bank of Cleveland Economic Commentary; https://www.clevelandfed.org/newsroom-and-events/publications/economic-commentary/economic-commentary-archives/2008-economic-commentaries/ec-20080201-explaining-apparent-changes-in-the-phillips-curve-the-great-moderation-and-monetary.aspx
4. Comanor, W. S. and R. H. Smiley (1975): Monopoly and the Distribution of Wealth, Quarterly Journal of Economics 89(2), 177–194.
5. Costa, L. F. and H. D. Dixon (2011): Fiscal Policy Under Imperfect Competition with Flexible Prices: An Overview and Survey, The Open-Access, Open-Assessment E-Journal 5, 2011(3); http://dx.doi.org/10.5018/economics-ejournal.ja.2011-3.
Cited by
3 articles.
订阅此论文施引文献
订阅此论文施引文献，注册后可以免费订阅5篇论文的施引文献，订阅后可以查看论文全部施引文献
1. Personal Income Taxation and Its Effects on Economic Development and Growth;Research Anthology on Macroeconomics and the Achievement of Global Stability;2022-08-05
2. Does South Africa’s tax effort fall short of its tax capacity?;Development Southern Africa;2021-02-23
3. Personal Income Taxation and Its Effects on Economic Development and Growth;Bridging Microeconomics and Macroeconomics and the Effects on Economic Development and Growth;2021