AMultisectoralGeneralEquilibriumTaxModelforEvaluation.ppt

A Multisectoral General Equilibrium Tax Model for Evaluation of the Impacts of a Tax Reform Program. Two sector Model Sixteen Sector Model of the UK Economy Explanation or Results of tax Reform Both wage rate and rental rates have increased because reduction of taxes increases their demand, given their fixed supplies, their prices have increased Relative price of good 2 has increased Output of both sectors have increased Gross income of household has increased too Amount of transfer has reduced Multisectoral General Equilibrium Tax Model for the UK Economy With Multiple Capital Asset References Ballard, C.L., D. Fullerton , J.B. Shoven and J. Whalley (1985) A General Equilibrium Model for Tax Policy Evaluation. University of Chicago Press, Chicago. Bhattarai, K. (2000) Efficiency and Factor Reallocaiton Effects and Marginal Excess Burden of Taxes in the UK Economy, Hull Economics Research Papers no. 278, University of Hull, HU6 7RX, UK. Bhattarai, K. (1999) A Forward-Looking Dynamic Multisectoral General Equilibrium Tax Model of the UK Economy, Hull Economics Research Papers no. 269, University of Hull, HU6 7RX, UK. Bhattarai, K. and J. Whalley (1999), “General Equilibrium Modelling of UK Tax Policy” in Sean Holly and Martin Weale ed. Econometric Modelling: Technique and Applications, Cambridge University Press. Bhattarai, K., M. Ghosh and J. Whalley (1999) “On Some Unusual Properties of Trade Closure”, Economics Letters, Vol.62, no.1, pp. 13-21. Rutherford TF (1995) Extension of GAMS for Complementary Problems Arising in applied Economic Analysis. Journal of Economic Dynamics and Control 19 1299-1324. Shoven JB and Whalley J (1973) General Equilibrium with Taxes: A Computation Procedure and an Existence Proof. Review of Economic Studies 40:475-90. * Consumer’s Problem Firms’ Problem Government Budget: Two Sector General Equilibrium Model of Taxes A simple input-output table for a two sector economy M X G I C GY2 GY1 Total TK T2,k T1,k Cap