The Effects of Inflation-Induced Tax Increases on Stock and Housing Prices.
This paper explores the contention that the dramatic increase in the real price of housing experienced during the 1970s was a cons equence of the interaction of increasing inflation with a nonneutral tax system that discriminates against corporate-held assets. In the c ontext of a dynamic rational-expectations, two-sector (housing servic es and a corporate produced background good) model in which capital a llocation responds to changes in the corporate tax rate, it is demons trated that there is no reason to expect housing prices to rise with inflation-induced increases in taxes. Copyright 1987 by The editors of the Scandinavian Journal of Economics.
Year of publication: |
1987
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Authors: | Cooley, Thomas F ; Salyer, Kevin D |
Published in: |
Scandinavian Journal of Economics. - Wiley Blackwell, ISSN 1467-9442. - Vol. 89.1987, 4, p. 421-34
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Publisher: |
Wiley Blackwell |
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