Government budget constraint
Posted: Sat Mar 25, 2017 9:54 am
Dear friends, I am new in this field. I hava a trivial question that I find the lump-sum tax to total output ratio is calibrated to be higher than 0.155. Or else, the Government's budget cannot be balanced.
Specifically, I include unemployment benefits, government consumption and current period's bond financed previous period's bond' return, taxes of consumption and revenue profits, and lump-sum tax. However, the budget cannot be balanced unless lump-sum tax is enough high.
Hence, is this ratio reasonable? Thanks in advance! !
Specifically, I include unemployment benefits, government consumption and current period's bond financed previous period's bond' return, taxes of consumption and revenue profits, and lump-sum tax. However, the budget cannot be balanced unless lump-sum tax is enough high.
Hence, is this ratio reasonable? Thanks in advance! !