Philippine E-Journals

An Econometric Analysis of Taxation as aFiscal Price Stabilizer 1975 – 1985

Roberto B. Raymundo

Discipline: Economics, Business

 

Abstract:

In the realm of Public Finance, taxationbeing the major source of revenues forgovernment expenditure may also serve asecondary purpose -- that of a fiscal stabilizer.Fiscal stabilization would refer to the ability

of fiscal policy to control the growth or limitfluctuations in the movement of aggregatedemand. Progressive taxation in particularserves as a built-in stabilizer because of theexpected regulatory effects it creates on aggregatedemand.