A New Search-and-Matching Computable General Equilibrium Model: Progressive Consumption Taxation and Unemployment Equilibrium Effects on Growth, Unemployment, and Incidence
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I simulate the effects of the enactment of two comprehensive consumption-based tax reforms in the United States - a Hall-Rabushka style flat tax, and the Bradford X-tax. My analysis includes a search and matching model for unemployment in the labor market with endogenous wage bargaining. I examine the long-run economic effects of these reforms, including those in the labor market, as well as the distributional effects on twelve different income groups. In this context, a reform-induced wage reduction that reduces the incentive to work could nevertheless create jobs. However, it may also affect disproportionately the welfare of lower-income groups.
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Del Carpio Neyra, Victor. "A New Search-and-Matching Computable General Equilibrium Model: Progressive Consumption Taxation and Unemployment Equilibrium Effects on Growth, Unemployment, and Incidence." (2017) Diss., Rice University. https://hdl.handle.net/1911/96141.