Recovering hidden indirect tax rates for improved calibration in multisectoral modelling

Juan Carlos Collado, Ferran Sancho

Research output: Contribution to journalArticleResearchpeer-review

Abstract

We explain in this work why a straight calibration to published input-output or SAM data in multisectoral modelling may lead to the use of an incorrect representation of the productive technology, hence casting doubts on the value of the empirical results. The culprit is the possible presence of indirect taxation in the form of, for instance, a value-added tax. We show how to unveil the hidden tax rates so as to clean up published data of this possibly distorting presence and therefore calibrate the correct production technology. This technology can then be used for multisectoral (i.e. CGE, input-output) analysis and simulations.
Original languageEnglish
Pages (from-to)81-88
JournalEconomic Systems Research
Volume14
DOIs
Publication statusPublished - 20 Mar 2002

Keywords

  • Calibration
  • General equilibrium models
  • Input-output data

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