This paper shows that the labour intensity of home production of a final consumption good affects national income and income multiplier effects of public expenditure financed by taxation. A reduction in labour intensity increases the level of national income but decreases the magnitude of the balanced budget multiplier effect. This result holds whether the tax instrument is distortionary or non-distortionary. It follows that the recent diffusion of labour-saving innovations such as washing machines and vacuum cleaners may have the effect of decreasing the effectiveness of fiscal policy.
| Published in |
International Journal of Economic Behavior and Organization (Volume 3, Issue 2-1)
This article belongs to the Special Issue Recent Developments of Economic Theory and Its Applications |
| DOI | 10.11648/j.ijebo.s.2015030201.15 |
| Page(s) | 23-30 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2015. Published by Science Publishing Group |
Multiplier Effects, Public Expenditure, Taxation, Labour Intensity, and Home Production
| [1] | Becker, G. S. (1965) . ‘A Theory of the Allocation of Time’, Economic Journal, 75, 493-517. |
| [2] | Dixon, H. D. (1987). ‘A Simple Model of Imperfect Competition with Walrasian Features’, Oxford Economic Papers, 39, 134-160. |
| [3] | Heijdra, B. J., Lighthart, J. E. and van der Ploeg, F. (1998). ‘Fiscal Policy, Distortionary Taxation, and Direct Crowding Out under Monopolistic Competition’, Oxford Economic Papers, 50, pp.79-88. |
| [4] | Kleven, H. J. (2004). ‘Optimal Taxation and the Allocation of Time’, Journal of Public Economics, 88, pp. 545-557. |
| [5] | Mankiw, N. G. (1988). ‘Imperfect Competition and the Keynesian Cross’, Economics Letters, 26, pp. 7-13. |
| [6] | Molona, H. and Moutos, T. (1991). ‘A Note on Taxation, Imperfect Competition and the Balanced Budget Multiplier’, Oxford Economic Papers, 43, pp.68-74. |
| [7] | Yoshida, M. and Turnbull, S. (2009). ‘Public Goods and the Technology of Consumption under Imperfect Competition’, mimeo. |
APA Style
Masatoshi Yoshida, Stephen J. Turnbull. (2015). The Balanced Budget Multiplier and Labour Intensity in Home Production. International Journal of Economic Behavior and Organization, 3(2-1), 23-30. https://doi.org/10.11648/j.ijebo.s.2015030201.15
ACS Style
Masatoshi Yoshida; Stephen J. Turnbull. The Balanced Budget Multiplier and Labour Intensity in Home Production. Int. J. Econ. Behav. Organ. 2015, 3(2-1), 23-30. doi: 10.11648/j.ijebo.s.2015030201.15
AMA Style
Masatoshi Yoshida, Stephen J. Turnbull. The Balanced Budget Multiplier and Labour Intensity in Home Production. Int J Econ Behav Organ. 2015;3(2-1):23-30. doi: 10.11648/j.ijebo.s.2015030201.15
Share This Article
Twitter
Linked In
Facebook
Copy
Download@article{10.11648/j.ijebo.s.2015030201.15,
author = {Masatoshi Yoshida and Stephen J. Turnbull},
title = {The Balanced Budget Multiplier and Labour Intensity in Home Production},
journal = {International Journal of Economic Behavior and Organization},
volume = {3},
number = {2-1},
pages = {23-30},
doi = {10.11648/j.ijebo.s.2015030201.15},
url = {https://doi.org/10.11648/j.ijebo.s.2015030201.15},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijebo.s.2015030201.15},
abstract = {This paper shows that the labour intensity of home production of a final consumption good affects national income and income multiplier effects of public expenditure financed by taxation. A reduction in labour intensity increases the level of national income but decreases the magnitude of the balanced budget multiplier effect. This result holds whether the tax instrument is distortionary or non-distortionary. It follows that the recent diffusion of labour-saving innovations such as washing machines and vacuum cleaners may have the effect of decreasing the effectiveness of fiscal policy.},
year = {2015}
}
TY - JOUR T1 - The Balanced Budget Multiplier and Labour Intensity in Home Production AU - Masatoshi Yoshida AU - Stephen J. Turnbull Y1 - 2015/02/27 PY - 2015 N1 - https://doi.org/10.11648/j.ijebo.s.2015030201.15 DO - 10.11648/j.ijebo.s.2015030201.15 T2 - International Journal of Economic Behavior and Organization JF - International Journal of Economic Behavior and Organization JO - International Journal of Economic Behavior and Organization SP - 23 EP - 30 PB - Science Publishing Group SN - 2328-7616 UR - https://doi.org/10.11648/j.ijebo.s.2015030201.15 AB - This paper shows that the labour intensity of home production of a final consumption good affects national income and income multiplier effects of public expenditure financed by taxation. A reduction in labour intensity increases the level of national income but decreases the magnitude of the balanced budget multiplier effect. This result holds whether the tax instrument is distortionary or non-distortionary. It follows that the recent diffusion of labour-saving innovations such as washing machines and vacuum cleaners may have the effect of decreasing the effectiveness of fiscal policy. VL - 3 IS - 2-1 ER -
Email: