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- W2045007019 abstract "This paper considers a model of an open economy in which the degree of income-tax progressivity influences the interaction among openness, central bank independence, and the inflation rate. Our model suggests that an increase in the progressivity of the tax system induces a smaller response in real output to a change in the price level. This implies that increased income-tax progressivity reduces the equilibrium inflation rate and that the effect of increased income-tax progressivity on inflation is smaller when the central bank places a higher weight on inflation or when there is greater openness. Examination of cross-country inflation data provides empirical support for these key predictions." @default.
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- W2045007019 date "2009-09-01" @default.
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- W2045007019 title "Openness, income-tax progressivity, and inflation" @default.
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- W2045007019 doi "https://doi.org/10.1016/j.jmacro.2008.10.003" @default.
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