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Analysis of The Impact of The Country's Tax Policies During The Outbreak of The Covid-19 On The Country's Employment Level: A Dynamic Stochastic General Equilibrium Approach
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Jaber Layegh gigloo   , Kazem Yavari * , Hasan Heydari , Reza Najarzadeh |
| yazd , kyavari@yazd.ac.ir |
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Abstract: (67 Views) |
| The challenge of employment or the issue of unemployment is not only considered one of the most important social issues of the day in the country, but considering the rate of population growth in the past two decades, it can also be considered the most important economic-social challenge of the next few decades. On the other hand, in the last hundred years, the world has seen different economic and non-economic crises, such as the 2008 American financial crisis and the spread of the C ovid-19. The economic policies used to overcome the crisis have been different according to the time period and the depth of the recession resulting from the crisis, the reasons for the occurrence of the crisis and the extent of the crisis in different countries. Therefore, the purpose of this article is to analyze the country's tax policies during the outbreak of the covid-19 on the employment level of the country: the Dynamic stochastic general equilibrium approach during the years 1397 to 1400. The findings of this research indicated that the shock of Corona caused a 50% decrease in employment in the service sector. The decline in employment affects the borrowers sector and reduces their consumption by almost 10%. This decrease in the consumption of the non-service sector has also led to a decrease in employment in other sectors by 4 percent. In turn, these interactions lead to a 10 percent decrease in GDP. In order to investigate the effect of the government's tax policies on macroeconomic variables, especially the level of employment during the outbreak of the Corona virus, a dynamic stochastic general equilibrium model has been designed for the Iranian economy in the form of three scenarios facing the government. After specifying the model, optimizing and obtaining the first-order condition of the economic factors, the results of the calibration indicate that the effect of the government's financial policies on the macroeconomic variables under all three scenarios are almost the same and are in accordance with the theoretical expectations of the economy. The increase in government spending has helped to maintain employment in the non-service sector, and the reduction of taxes by maintaining the income of borrowers leads to a decrease in unemployment and a decrease in default rates. Based on this, it is suggested that the government reduce the harmful effects of the spread of the corona virus by adopting better financial policies, especially in the field of taxation, so that the level of employment and other macroeconomic variables reach their stable status. |
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| Keywords: Covid-19 Outbreak, Employment Level, Tax Policies, Dynamic Stochastic General Equilibrium Approach |
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Full-Text [PDF 1446 kb]
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Type of Study: Research |
Subject:
General
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