2 - Reduction in the tax burden and consumption growth in the Netherlands: consumption puzzle 2001

Wetenschappelijke publicatie
Date 1 February 2002

This article discusses the reduction in the tax burden resulting from the Dutch tax reform that was implemented in 2001. The consumption growth lagged behind the substantial increase in purchasing power. This 'consumption puzzle' is put in the perspective of the relatively high consumption growth in the preceding years. Wealth- and saturation-effects are put forward as the main explanations for the divergence of the consumption growth and the purchasing power increase in recent years. JEL No. E21,H31