Fiscal devaluation boosts Czech economy by 0.5% GDP growth in first year
Fiscal devaluation, shifting taxes from paychecks to sales, can help a small open economy like the Czech Republic. By using a special model, the study found that this tax change can increase the country's GDP growth by 0.5% in the first year. After that, the government spending on things like goods, services, and social security can also boost the economy. This shows that adjusting taxes and spending can help the government improve the economy.