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Table 2.
Initial values of exogenous variables and parameters
VariableDefinitionValue
 Intertemporal elasticity of substitution 2.00a 
 Pure rate of time preference 0.037 
 Intensity of business capital usage in production 0.50 
 Depreciation rate 0.07b 
 Value-added tax rate 0.153c 
 Output tax rate 0.011c 
VariableDefinitionValue
 Intertemporal elasticity of substitution 2.00a 
 Pure rate of time preference 0.037 
 Intensity of business capital usage in production 0.50 
 Depreciation rate 0.07b 
 Value-added tax rate 0.153c 
 Output tax rate 0.011c 

Notes:a. We also did a sensitivity analysis for= 0.7. We adjustto −0.005 to preserve the base year ratio of private consumption to output when changing.

b. We also did a sensitivity analysis for= 0.1.

c. Calibrated in the base year to match the shares in total tax revenue.

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