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DTSTART:20250330T010000
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DTSTART:20251026T010000
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DTSTART;TZID=Europe/Helsinki:20251117T121500
DTEND;TZID=Europe/Helsinki:20251117T133000
DTSTAMP:20260710T005951
CREATED:20251113T065159Z
LAST-MODIFIED:20251113T065159Z
UID:18557-1763381700-1763386200@crest.science
SUMMARY:Daniel JAAR  (EUI\, PUC Chile) "Informality\, Inflation and Fiscal Progressivity in Developing Countries"
DESCRIPTION:[vc_row][vc_column][vc_column_text]Macro seminar\nTime : 12h15 – 13h30 \nDate : 17 th  November 2025 \nRoom 3001 \nDaniel JAAR (EUI\, PUC Chile) “Informality\, Inflation and Fiscal Progressivity in Developing Countries” \nAbstract: We develop a dynamic general equilibrium model with heterogeneous households and a cash-intensive informal sector that replicates two empirical patterns: the negative relationship between informality and firm productivity\, and the declining share of informal consumption with household wealth. The non-homotheticity of informal consumption implies that tax incidence is heterogenous: poor households pay less consumption taxes but are more exposed to inflation. We use the model to study the distributional effects of financing government revenue through seigniorage versus consumption taxes. Calibrated to Peru – where informality accounts for around half of economic activity – the model shows that informal purchases provide significant savings through lower prices\, particularly for poor households\, who save up to 11% compared to purchasing the same bundle formally. The model also uncovers substantial variation in preferences over revenue-neutral combinations of inflation and consumption taxes: households in the top decile would like inflation to be as high as 12%\, while those in the bottom decile favor inflation below 5%. This disagreement grows with the size of the informal sector. \nOrganizer : Suzanne BELLUE \n
URL:https://crest.science/event/daniel-jaar-eui-puc-chile-informality-inflation-and-fiscal-progressivity-in-developing-countries/
CATEGORIES:Macroeconomics,Seminars
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