Fiscal Instruments, Welfare and Inflation

A HANK Approach

Authors

DOI:

https://doi.org/10.14195/2183-203X_58_3

Keywords:

Fiscal Instruments, HANK, Inflation, Welfare, VAT, Transfers

Abstract

This study aims at answering two research questions. Firstly, given a change in the VAT rate and a change in targeted transfers, which would impact inflation the most? Secondly, after a negative supply shock, which measure would be more welfare-friendly? We find that VAT changes generate a greater impact on inflation than changes in transfers, both empirically and within the structural model. Additionally, we find that a decrease in the VAT rate, though it generates more inequalities, is more welfare-friendly if it is measured through a utilitarian approach.

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Published

2024-11-27

Issue

No. 58 (2024)

Section

Articles

License

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows sharing the work with recognition of authorship and initial publication in Antropologia Portuguesa journal.