Original scientific paper
https://doi.org/10.2478/zireb-2018-0014
Oil Shocks and the Excise Duty Tax in a DSGE Model Setting
Črt Lenarčič
orcid.org/0000-0001-8752-0858
; Banka Slovenije, Ljubljana, Slovenia
Abstract
This paper sets up a small open economy general equilibrium model operating in a monetary union. Exogenous oil shocks that hit the modelled economy are alleviated by introducing a pro-cyclical excise duty tax rule on oil prices. It provides a model-based theoretical background for studying a fiscal response of curbing the negative effects of volatile global oil prices on inflation. Against this backdrop, we estimate the key parameters of the DSGE model and simulate different responses of the fiscal policy tax rule, based on different values of the responsiveness of the excise duty parameter.
Keywords
Oil shocks; fiscal policy tax rule; DSGE model; inflation
Hrčak ID:
209085
URI
Publication date:
21.11.2018.
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