The literature testing for aggregate impacts of taxes on long-run growth rates in the OECD has generally used tax rate measures constructed from macroeconomic aggregates such as tax revenues. These have a number of advantages but two major disadvantages: they are typically average, rather than...

In this study, we examine the effect of consumption tax on the growth rate and welfare in a model with money and endogenous fertility. First, we show that an increase in consumption tax always reduces the economic growth rate but has an ambiguous effect on welfare. We show a numerical example...