Econometric analysis of the peculiarities of the impact of fiscal and monetary instruments on aggregate demand in the Georgian economy

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Ivane Javakhishvili Tbilisi State University Press
According to the model analysed in this article, increase of avarage tax rate can have either positive or negative impact on aggregate demand.Character of this impact is determined by the correspondence between marginal propensity of households to consume and marginal propensity for goverment purchases. This correspondence varies across states and time periods. In the article by means of econometric analysis it is shown that in 2006-2017 years marginal propensity of households to consume exceeded marginal propensity for goverment purchases in economy of Georgia. Because of this, aggregate demand was negatively dependent on avarage tax rate in Georgia during the discussed period of time.
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aggregate demand; marginal propensity for goverment purchases; marginal propensity to consume; avarage tax rate
III International Scientific Conference: "Challenges of Globalization in Economics and Business", Tbilisi, 2018, pp. 37-43