DROMEL, NICOLAS L.; PINTUS, PATRICK A. - In: Journal of Public Economic Theory 10 (2008) 3, pp. 329-349
We assess the stabilizing effect of progressive income taxes in a monetary economy with constant returns to scale. It is shown that tax progressivity reduces, in parameter space, the likelihood of local indeterminacy, sunspots and cycles. However, considering plausibly low levels of tax...