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구조적 모형을 이용한 조세제도 변화효과 분석(Analysis on macroeconomic effects of tax system change: A general equilibrium approach)

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Title 구조적 모형을 이용한 조세제도 변화효과 분석(Analysis on macroeconomic effects of tax system change: A general equilibrium approach)
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Material Type Reports
Author(Korean)

이태석

Publisher

세종 : 한국개발연구원

Date 2017-02
Series Title; No 정책연구시리즈 / 2017-04
ISBN 979-11-5932-264-8
Pages 118
Subject Country South Korea(Asia and Pacific)
Language Korean
File Type Documents
Original Format pdf
Subject Economy < Financial Policy
Holding http://www.kdi.re.kr
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Abstract

This paper analyzes macroeconomic effects of tax system change based on a calibrated dynamic stochastic general equilibrium model. Based on the IMF’s Global Integrated Monetary and Fiscal (GIMF) basic model, the model includes a pension module and considers four countries to reflect the future trend in age-related government expenditure and the trade structure of the Korean economy. Key parameters were set based on the latest statistical data and previous research results. We examine macroeconomic effects of three types of tax system change: the temporary tax reductions to boost the economy, the permanent tax increments to finance the expected age-related or pension expenditure, and realistic tax policy changes in recent years or in the near future of home and foreign countries. These quantitative exercises give us the following policy implications. First, the tax cut policies for stimulating the economy are less effective than the fiscal spending expansions. Temporary tax reductions may be at best complementary to other government spending policies firming up the policy direction of government in exceptional circumstances such as the economic crisis. Second, we need to start discussions on the structural change of the tax system to finance the long-term age-related spending. The consumption taxes are the most efficient policy measures minimizing the reduction in aggregate output but there is a risk of sparking political opposition because the consumption taxes tends to be regressive and the private consumption will sharply shrink at the time of tax hike. Third, the domestic spillover effects of major countries' tax policies are relatively large due to the small open economy characteristic of Korean economy, so it is necessary to consider preemptive policy responses to mitigate or reinforce the domestic ripple effects.