Raising the Consumption Tax in Japan: Why, When, How?

Business & Finance, Economics, Money & Monetary Policy, Macroeconomics
Cover of the book Raising the Consumption Tax in Japan: Why, When, How? by Kenneth Mr. Kang, Michael Mr. Keen, Mahmood Pradhan, Ruud A. Mooij, INTERNATIONAL MONETARY FUND
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Author: Kenneth Mr. Kang, Michael Mr. Keen, Mahmood Pradhan, Ruud A. Mooij ISBN: 9781463982812
Publisher: INTERNATIONAL MONETARY FUND Publication: June 16, 2011
Imprint: INTERNATIONAL MONETARY FUND Language: English
Author: Kenneth Mr. Kang, Michael Mr. Keen, Mahmood Pradhan, Ruud A. Mooij
ISBN: 9781463982812
Publisher: INTERNATIONAL MONETARY FUND
Publication: June 16, 2011
Imprint: INTERNATIONAL MONETARY FUND
Language: English

The note will make the case for a substantial increase in the VAT in Japan as a core measure of fiscal consolidation, assess its macroeconomic impact (on real activity and inflationary expectations), consider key elements in its design and implementation (dealing with the distributional consequences; ‘big-bang’ versus preannounced step increases); the importance of retaining a single rate and adopting compensating spending measures as needed) and a range of related issues (such as the pros and (likely even larger) cons of earmarking).

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The note will make the case for a substantial increase in the VAT in Japan as a core measure of fiscal consolidation, assess its macroeconomic impact (on real activity and inflationary expectations), consider key elements in its design and implementation (dealing with the distributional consequences; ‘big-bang’ versus preannounced step increases); the importance of retaining a single rate and adopting compensating spending measures as needed) and a range of related issues (such as the pros and (likely even larger) cons of earmarking).

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