Taxation Structure Change,Population Growth, and the High-Level Equilibrium Trap

This paper provides a new hypothesis for interpreting the formation of the “high-level equilibrium trap” in China.Since the Han Dynasty,the tax reform in Chinese history has been continuously promoted along the route of tan ding ru mu,and the dynamic of taxation structure perfectly matches the dynamic of population growth.This paper develops a dynamic general equilibrium model with endogenous fertility rate,analyzes the effects of taxation structure on fertility (income effect,dynamic effect and price effect),and reveals the role of taxation evolution in the formation of the high-level equilibrium trap.A numerical simulation is applied to show the implication of taxation change in population growth and economic evolution.