Angsoka Yorintha Paundralingga: This paper provides a thorough analysis of the macroeconomic effects of recent income tax changes in Korea using a dynamic stochastic general equilibrium (DSGE) model with heterogeneous households. The authors utilize a novel approach to identify how the 2022 income tax revision affects the tax-benefit structure and use this to examine the long-term impacts on key economic variables. Overall, the paper makes a valuable contribution to understanding the effects of tax policy changes in Korea. However, there are several areas where the paper could be strengthened.
The methodological approach combining empirical estimation of a net tax function with a DSGE model is sound. Some suggestions to enhance this section:
Provide more justification for using the specific net tax function form from Heathcote et al. (2017). Are there alternative specifications that could be considered?
Discuss potential limitations of the partial equilibrium approach for identifying tax function changes. How...