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• W3009969957 abstract "Abstract Recent empirical evidence finds that progressive taxation is an effective economic stabilizer, but theoretical results disagree. This paper shows that a lifecycle model with total factor productivity shocks can match the empirical evidence. If the US economy switched from progressive to proportional taxation, output volatility would increase by 5 percent. Progressive taxes act as stabilizers by reducing income volatility among the young and soon‐to‐be retirees. Thus, incorporating a rich lifecycle structure in the model is important to match the data. The model is then used to study the welfare implications of reducing tax progressivity." @default.
• W3009969957 created "2020-03-13" @default.
• W3009969957 creator A5037818582 @default.
• W3009969957 date "2021-01-27" @default.
• W3009969957 modified "2023-10-03" @default.
• W3009969957 title "Progressive Taxation and Economic Stability*" @default.
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• W3009969957 doi "https://doi.org/10.1111/sjoe.12410" @default.
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