An estimated fiscal Taylor rule for the postwar United States

Arbeitspapier

This paper documents the systematic response of postwar U.S. fiscal policy to fiscal imbalances and the business cycle using a multivariate Fiscal Taylor Rule. Adjustments to taxes and purchases both account for a large portion of the fiscal response to debt, while authorities seem reluctant to adjust transfers. As expected, taxes are highly procyclical; purchases are acyclical; and transfers are countercyclical. Neither pattern has changed much over time, except that adjustment happens more slowly after 1981 than before 1980. The role of adjustments to purchases in stabilizing the debt indicates that the recent discussion about spending reversals is highly relevant.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Kiel Working Paper ; No. 1705

Classification and Topics

• Classification: Wirtschaft ; Fiscal Policy ; Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy ; Taxation, Subsidies, and Revenue: General ; National Deficit; Surplus
• Subject: Spending reversals ; Fiscal Taylor Rule ; deficits ; fiscal policy ; taxes ; spending ; transfer payments ; Finanzpolitik ; Taylor-Regel ; Konjunktur ; Schätzung ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Reicher, Christopher Phillip
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/45865
• Last update: 10.03.2025, 11:45 AM CET