| Summary: | 碩士 === 國立中山大學 === 經濟學研究所 === 92 === The thesis has closely examined that an important shortcoming of the Keynesian analysis is the neglect of potential tax-induced aggregate supply effects, and therefore, just as Marshall''s proverbial scissors with one "misplaced" blade, the government cannot make proper policy decision. Hence, this paper incorporates the tax-induced aggregate supply effects into the analysis.
When a model does not include the supply-side effects of tax-induced, it degrades to a Ramirez (1986) and cannot be sued for policy assignment. On the other hand, a model incorporates the tax-induced aggregate supply effects remedies the flaws in Ramirez (1986) and can be used for appropriate policy assignment.
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