Does fiscal discipline restrain government from increasing its budget size? To answer this question, this paper investigates whether Wagner's law is satisfied for two types of states: U.S. states, in which fiscal sovereignty is established, and German states, in which fiscal transfer dependence...

Faced with the trade-off between preventing the spread of the coronavirus disease (COVID-19) and promoting economic recovery, in July 2020, the Japanese government launched the "Go To Travel" campaign (a subsidy for domestic travel) to revitalize its moribund tourism industry. This study...

We use structural method, that is, Dynamic Stochastic General Equilibrium (DSGE) model with fiscal stabilization rules, for calculating the tax revenue elasticity rate and estimate more plausible value of it. In the short-run, the tax revenue elasticity to output takes negative value and, in...

In this study, we investigate the effect of a positive public investment shock on Japan's private consumption, real wages, and real effective exchange rate using a factor augmented vector autoregressive (FAVAR) model applied to a rich dataset. We demonstrate that private consumption increases,...

Recently, discussion of corporate tax reduction is hot political issue in Japan. Especially, some researchers and politicians insist on the reduction of corporate tax rate, following the fact of "Corporate tax paradox", which means that corporate tax revenue per Gross Domestic Product (GDP) has...

Recently, several countries, which include not only developing, but also developed ones, face the severe sovereign crisis. In this circumstance, we introduce the new method for testing the sustainability of government debt. Previous studies which investigate the sustainability of government debt...

This paper investigates the condition which raising individual consumption tax raises output and private consumption in general equilibrium model. In many of the neoclassical papers, the government expenditure decreases consumption because the government expenditure causes the negative wealth...

This paper shows that there is the weak “Globally” Ricardian rules that sustains the sustainability of the government debt in the sense that it binds intertemporal government budget constraint. And we compare our result with the former paper about testing the government debt sustainability....

Recent monetary policy analyses show the profound implications of progressive taxation for monetary policy. This paper investigates how progressive taxation on labor income alters the effect of model uncertainty by introducing robust control. We analyze the effect by deriving closed form...