Consumption Taxes Could Stabilize Economy Better Than Income Taxes.
Consumption taxes and income taxes have different effects on the stability of the economy. The type of tax used affects how well the government can control the economy through monetary policy. The study shows that the choice between consumption taxes and income taxes can impact how well the economy can be stabilized. This means that if the government decides to shift towards using consumption taxes more, it could change how monetary policy needs to be set to keep the economy stable.