CEU Electronic Theses and Dissertations, 2020
| Author | Nguyen, Thi Bao Yen |
|---|---|
| Title | The effect of VAT rate on inflation in the United Kingdom (2008-2012) |
| Summary | This paper estimates and compares the inflation effects of the two VAT increases in January 2010 and January 2011 using the United Kingdom Consumer Price Index (CPI) microdata from October 2008 to December 2012. I compute the average frequency and magnitude of the consumer price changes and use the inflation decomposition to quantify the inflation effects of the VAT reforms. I find that although the two reforms in Value Added Tax rate (VAT) have the same size, the inflation effect of the VAT increase in 2011 is greater than the inflation effect in 2010. The results remain robust in the time series regression model and the dynamic selection model. The finding suggests that the level of VAT pass-through is higher when there is no restriction in consumer demand and the reform is not announced a long time beforehand. |
| Supervisor | Ádám Reiff |
| Department | Economics MA |
| Full text | https://www.etd.ceu.edu/2020/nguyen_thi-bao-yen.pdf |
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