Taxation and Kalecki's theory of the business cycle

Anthony J. Laramie, Douglas Mair

    Research output: Contribution to journalArticlepeer-review

    16 Citations (Scopus)


    Kalecki's theories of tax incidence and the business cycle are integrated to demonstrate how the amplitude of the business cycle is affected by the taxation of wages and profits. The impact of taxation depends on: (1) the stage of the cycle; (2) the economy's long-run position; (3) the direction of tax policy; and (4) the process and degree of tax shifting. With no tax shifting, a wage tax dampens the cycle and a profits tax amplifies it. With tax shifting, the effects of both taxes become indeterminate. © 1996 Academic Press Limited.

    Original languageEnglish
    Pages (from-to)451-464
    Number of pages14
    JournalCambridge Journal of Economics
    Issue number4
    Publication statusPublished - Jul 1996


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