Template-Type: ReDIF-Paper 1.0
Author-Name: Konstantins Benkovskis
Author-X-Name-First: Konstantins
Author-X-Name-Last: Benkovskis
Author-Workplace-Name: Bank of Latvia
Author-Name: Eduards Goluzins
Author-X-Name-First: Eduards
Author-X-Name-Last: Goluzins
Author-Name: Olegs Tkacevs
Author-X-Name-First: Olegs
Author-X-Name-Last: Tkacevs
Author-Workplace-Name: Bank of Latvia
Title: CGE model with fiscal sector for Latvia
Abstract: This paper describes the first CGE model for Latvia that consists of 32 industries, 55 products and seven categories of final users. To construct the model we use Latvia's National Supply and Use tables for 2011 from the WIOD database. Special attention is devoted to the fiscal block: the model consists of five government expenditure types and five revenue sources, including such four major taxes as the personal income tax (PIT), state social insurance mandatory contributions (SSIMC), value added tax (VAT) and excise tax. We also introduce an endogenous shadow economy, the size of which depends on the level of tax rates and economic activity. These features of the model allow us to obtain rich and detailed conclusions about the effect of several fiscal measures on Latvia's economy, both in aggregate and by sector.
Creation-Date: 2016-07-04
File-URL: https://www.bank.lv/images/stories/pielikumi/publikacijas/petijumi/wp_2016_01.pdf
File-Format: Application/pdf
File-URL: https://www.macroeconomics.lv/sites/default/files/wp_2016_01_.pdf
File-Format: Application/pdf
Number: 2016/01
Classification-JEL: D58, C68, H2, H6
Keywords: CGE model, Latvia, fiscal policy
X-File-Ref: https://repec.bank.lv/refs/wpaper201601.txt
Handle: RePEc:ltv:wpaper:201601