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- Title
The Effects of Inflation-Induced Tax Increases on Stock and Housing Prices*.
- Authors
Cooley, Thomas F.; Salyer, Kevin D.
- Abstract
Abstract This paper explores the contention that the dramatic increase in the real price of housing experienced during the 1970s was a consequence of the interaction of increasing inflation with a non-neutral tax system that discriminates against corporate held assets. Within the context of a dynamic rational expectations two-sector (housing services and a corporate produced background good) model in which capital allocation responds to changes in the corporate tax rate, it is demonstrated that there is no reason to expect housing prices to rise with inflation-induced increases in taxes.
- Subjects
HOUSING; PRICE inflation; RATIONAL expectations (Economic theory)
- Publication
Scandinavian Journal of Economics, 1987, Vol 89, Issue 4, p421
- ISSN
0347-0520
- Publication type
Article
- DOI
10.2307/3440346