On the Laffer Effect in Post-Communist Economies: On the Bases of the Observation of Russian Literature

Abstract

Originally the Laffer Curve was formulated in a macroeconomic context, for which reason it is not applicable to individual taxes, but rather to a certain average aggregate tax. The 'corrections' to the Laffer Curve are based on a factor of time. High importance is the question – in which direction the average aggregate tax is changing: upward or downward, when the Laffer Effect always appears a couple of years later. Alternatives of the Laffer Curve with 'Hysteresis' are constructed in the article.

Keywords: Laffer Curve, taxes, supply-side economics, hysteresis

JEL Classification: E62, H21, P26, P35