gemTax_VAT_IncomeTax_5_4 {GE}

A General Equilibrium Model with Value-added Tax and Income Tax

Description

A general equilibrium model with value-added tax and income tax.

Usage

gemTax_VAT_IncomeTax_5_4(...)

Arguments

...

arguments to be passed to the function sdm2.

Examples

vat.rate <- 0.2 # value-added tax rate
income.tax.rate <- 0.2

dst.manu <- node_new("output",
                     type = "FIN",
                     rate = c(5 / 6, vat.rate),
                     "cc1", "vat"
)
node_set(dst.manu, "cc1",
         type = "SCES",
         es = 0.5, alpha = 1,
         beta = c(0.25, 0.75),
         "lab", "cap"
)

dst.serv <- node_new("output",
                     type = "FIN",
                     rate = c(5 / 6, vat.rate),
                     "cc1", "vat"
)
node_set(dst.serv, "cc1",
         type = "SCES",
         es = 0.5, alpha = 1,
         beta = c(0.75, 0.25),
         "lab", "cap"
)

dst.household <- node_new("util",
                          type = "SCES",
                          es = 0.5, alpha = 1,
                          beta = c(0.2, 0.8),
                          "manu", "serv"
)

dst.government <- node_new("util",
                           type = "SCES",
                           es = 0.5, alpha = 1,
                           beta = c(0.5, 0.5),
                           "manu", "serv"
)

dstl <- list(dst.manu, dst.serv, dst.household, dst.government)

ge <- sdm2(
  A = dstl,
  B = diag(c(1, 1, 0, 0), 5, 4),
  S0Exg = matrix(c(
    NA, NA, NA, NA,
    NA, NA, NA, NA,
    NA, NA, 360 * (1 - income.tax.rate), 360 * income.tax.rate,
    NA, NA, 240 * (1 - income.tax.rate), 240 * income.tax.rate,
    NA, NA, NA, 120
  ), 5, 4, TRUE),
  names.commodity = c("manu", "serv", "lab", "cap", "vat"),
  names.agent = c("manu", "serv", "household", "government"),
  numeraire = "lab"
)

ge$p
ge$z
addmargins(ge$DV)
addmargins(ge$SV)

## VAT rate reduction
dst.manu$rate <- dst.serv$rate <- c(5 / 6, vat.rate = 0.1)

ge.new <- sdm2(
  A = dstl,
  B = diag(c(1, 1, 0, 0), 5, 4),
  S0Exg = matrix(c(
    NA, NA, NA, NA,
    NA, NA, NA, NA,
    NA, NA, 360 * (1 - income.tax.rate), 360 * income.tax.rate,
    NA, NA, 240 * (1 - income.tax.rate), 240 * income.tax.rate,
    NA, NA, NA, 120
  ), 5, 4, TRUE),
  names.commodity = c("manu", "serv", "lab", "cap", "vat"),
  names.agent = c("manu", "serv", "household", "government"),
  numeraire = "lab"
)

ge.new$p
ge.new$z
addmargins(ge.new$DV)
addmargins(ge.new$SV)