Economics, Econometrics and Finance
2 years ago

Iran's Tax Shocks Lead to GDP Drop and Inflation Spike.

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Sosyoekonomi
The Effects of Tax Shocks on GNP and Inflation in Iran, A DSGE Approach
Seyed-nezamuddin MAKİYAN, Seyed Mohamad Saleh NAJAFİ FARASHAH

Paper Summary

The article explores how changes in taxes affect Iran's economy. By using a special model, the researchers found that a tax increase on things people buy can slightly lower the country's GDP and inflation. Also, when taxes on imported goods go up, the GDP drops more, and prices rise in the short term. This suggests that Iran should think carefully about changing its tax policies.

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