Query:
faculty: "FEB" and publication year: "2001"
| Authors | A.M. Riedl, F.A.A.M. van Winden | | Title | Does the wage tax system cause budget deficts? A macro-economic experiment |
| Journal | Public Choice |
| Volume | 109 |
| Year | 2001 |
| Issue | 3-4 |
| Pages | 371-394 |
| ISSN | 0048-5829 |
| Faculty | Faculty of Economics and Business |
| Institute/dept. | FEB: Research Institute in Economics and Econometrics Amsterdam (RESAM) |
| Keywords | Price uncertainty; Competitive firm; Input demand |
| Abstract | In this paper we investigate experimentally the economic functioning of a wage tax system for financing unemployment benefits in an international economy, in particular in reaction to budget deficits and tax adjustment. Our results support the hypothesis that due to out-of-equilibrium price uncertainty producers are reluctant to employ inputs. We also observe a downward pressure on wages exacerbated by an over-supply of labor by consumers. These observations can explain the budget deficits found. Furthermore, we find that tax adjustments in order to facilitate a balancing of the budget has strong adverse effects on unemployment and real GDP. |
| Document type | Article |
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