Tax multiplier
Revision as of 19:34, 2 July 2020 by Kainat9 (talk | contribs) (Created page with "Tax multiplier is the change in aggregate income resulting from a one-dollar change in taxes. Taylor principle]]. The proposition that a central bank should respond to an...")
Tax multiplier is the change in aggregate income resulting from a one-dollar change in taxes. Taylor principle]]. The proposition that a central bank should respond to an increase in inflation with an even greater increase in the nominal interest rate. Taylor rule]]. A rule for monetary policy according to which the central bank sets the interest rate as a function of inflation and the deviation of output from its natural level.
Definition
According to Macroeconomics by Mankiw (7th edition),
- Tax multiplier. The change in aggregate income resulting from a one-dollar change in taxes. Taylor principle]]. The proposition that a central bank should respond to an increase in inflation with an even greater increase in the nominal interest rate. Taylor rule]]. A rule for monetary policy according to which the central bank sets the interest rate as a function of inflation and the deviation of output from its natural level.
