Figure 10

The effects of an implicit indirect tax rate shock. A. Output; B. Unemployment; C. Implied unemployment rate. Notes: The solid red line represents the response of output/unemployment/unemployment rate to a 1 p.p. shock to the implicit indirect tax rate. The black dashed and round dot lines are 68% and 90% confidence intervals, which have been calculated by bootstrapping the residuals (1000 bootstrap replications were performed). The square dot orange line represents the implied unemployment rate response with 2012 unemployment rate weights. The green solid line corresponds to the pre-EAP SVAR.