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Taxation in General Equilibrium: an Introduction[Note 1. I should like to thank two referees for constructive ...]
Author(s) -
Creedy John
Publication year - 1997
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/1467-8586.00035
Subject(s) - economics , general equilibrium theory , commodity , diagrammatic reasoning , simple (philosophy) , production (economics) , microeconomics , factors of production , mathematical economics , partial equilibrium , order (exchange) , macroeconomics , computer science , market economy , philosophy , epistemology , finance , programming language
This paper provides an introduction to some aspects of the role of taxes in a static general equilibrium framework. The standard diagrammatic framework is first used, in the case of fixed factor supplies, in order to examine selective commodity and factor taxes. A simple two‐sector model, with Cobb–Douglas production functions and preferences, and allowing labour supplies to be endogenous, is then constructed. Several tax policies are examined using numerical examples.