scholarly journals The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks

2007 ◽  
Author(s):  
Christina Romer ◽  
David Romer
Keyword(s):  
Macroeconomic Effects ◽  
Tax Changes ◽  
Fiscal Shocks

scholarly journals The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks

2010 ◽  
Vol 100 (3) ◽  
pp. 763-801 ◽  
Author(s):  
Christina D Romer ◽  
David H Romer
Keyword(s):  
Economic Activity ◽  
Tax Policy ◽  
Economic Conditions ◽  
Macroeconomic Effects ◽  
Presidential Speeches ◽  
Tax Changes ◽  
The Impact ◽  
Fiscal Shocks

This paper investigates the impact of tax changes on economic activity. We use the narrative record, such as presidential speeches and Congressional reports, to identify the size, timing, and principal motivation for all major postwar tax policy actions. This analysis allows us to separate legislated changes into those taken for reasons related to prospective economic conditions and those taken for more exogenous reasons. The behavior of output following these more exogenous changes indicates that tax increases are highly contractionary. The effects are strongly significant, highly robust, and much larger than those obtained using broader measures of tax changes. (JEL E32, E62, H20, N12)

scholarly journals The Dynamic Effects of Personal and Corporate Income Tax Changes in the United States: Reply

2019 ◽  
Vol 109 (7) ◽  
pp. 2679-2691 ◽  
Author(s):  
Karel Mertens ◽  
Morten O. Ravn
Keyword(s):  
United States ◽  
Income Tax ◽  
The United States ◽  
Corporate Income Tax ◽  
Dynamic Effects ◽  
Valid Inference ◽  
Macroeconomic Effects ◽  
Tax Changes ◽  
Inference Methods

In this reply to a comment by Jentsch and Lunsford, we show that the evidence for economic and statistically significant macroeconomic effects of tax changes in Mertens and Ravn (2013) remains present for a range of asymptotically valid inference methods. (JEL E23, E62, H24, H25, H31, H32)

scholarly journals Transfer Payments and the Macroeconomy: The Effects of Social Security Benefit Increases, 1952–1991

2016 ◽  
Vol 8 (4) ◽  
pp. 1-42 ◽  
Author(s):  
Christina D. Romer ◽  
David H. Romer
Keyword(s):  
Monetary Policy ◽  
Social Security ◽  
Industrial Production ◽  
Positive Response ◽  
Social Security Benefit ◽  
Transfer Payments ◽  
Macroeconomic Effects ◽  
Tax Changes

This paper uses Social Security benefit increases from 1952 to 1991 to investigate the macroeconomic effects of changes in transfers. It finds a large, immediate, and significant positive response of consumption to permanent benefit increases. The response declines after about five months, and does not appear to spread to industrial production or employment. The effects of transfers are faster, but much less persistent and much smaller overall, than those of tax changes. Finally, monetary policy responds strongly to benefit increases but not to tax changes. This may account for the failure of the effects of transfers to persist or spread. (JEL E21, E62, E63, H31, H55)

scholarly journals Discretionary Tax Changes and the Macroeconomy: New Narrative Evidence from the United Kingdom

2013 ◽  
Vol 103 (4) ◽  
pp. 1507-1528 ◽  
Author(s):  
James Cloyne
Keyword(s):  
United States ◽  
United Kingdom ◽  
The United States ◽  
Policy Changes ◽  
Narrative Strategy ◽  
The United Kingdom ◽  
Macroeconomic Effects ◽  
The Uk ◽  
Tax Changes ◽  
Strategy I

This paper provides new estimates of the macroeconomic effects of tax changes using a new narrative dataset for the United Kingdom. Identification is achieved by isolating “exogenous” tax policy changes using the Romer and Romer narrative strategy. I find that a 1 percent cut in taxes increases GDP by 0.6 percent on impact and 2.5 percent over three years. The findings are remarkably similar to Romer and Romer narrative estimates for the United States, reinforcing the view that tax changes have powerful and persistent effects. “Exogenous” tax changes are also shown to have contributed to important episodes in the UK business cycle. (JEL E23, E32, E62, H20, H61)

The macroeconomic effects of legislated tax changes in Germany

2013 ◽  
Vol 66 (2) ◽  
pp. 397-418 ◽  
Author(s):  
B. Hayo ◽  
M. Uhl
Keyword(s):  
Macroeconomic Effects ◽  
Tax Changes
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