Sentence examples for distortionary effect from inspiring English sources
The distortionary effect of regulation on unemployment effectively puts a constraint on the design of fiscal and public policies.
Fuel duty is an area where taxes can have a distortionary effect, he says.
Offsetting the salutary "consumption smoothing" effect of unemployment benefits, many economists have also documented a distortionary effect: as benefit generosity increases, workers tend to remain unemployed longer.
Metrics, however, can also be manipulated to have a distortionary effect and, ironically, lead teams or investors to weigh factors incorrectly and result in costly mistakes, such as raising too much money.
Ideally, the optimal unemployment benefit would balance the desired consumption-smoothing effect against the undesired distortionary effects.
The way unemployment insurance is financed can be improved to reduce its unintended distortionary effects and to shore up the trust funds.
This provides another justification for some progressive form of taxation.On the other hand, progressive income taxes punish success and may have some distortionary effects (on entrepreneurship and job mobility, among other things).
Nevertheless, policies affecting the timing of transfers may have distortionary effects.
One likely reason why the growth effects of lowering the tax progressivity are lower than in Caucutt et al. (2003) is that in the absence of intergenerational links, the distortionary effects of capital income taxation are minimized.23.23
Second, concerning the labor supply decision, the distortionary effects implied by higher tax progressivity induce a sharp reduction in the labor supply of all types of individuals, with no (substantial) differences across different type individuals (see Fig. 3 where individual labor supplies (almost) overlap each other).
The road pricing tax is therefore a special instrument which has both distortionary and efficiency-enhancing effects on economic outcomes without introducing new technologies.
