A Temporary VAT Cut as Unconventional Fiscal Policy

Arbeitspapier

We exploit the unexpected announcement of an immediate, temporary VAT cut in Germany in the second half of 2020 as a natural experiment to study the spending response to unconventional fiscal policy. We use survey and scanner data on households’ consumption expenditures and their perceived pass-through of the tax change into prices to quantify its effects. The temporary VAT cut led to a substantial relative increase in durable spending of 36% for individuals with a high perceived pass-through. Semi- and non-durable spending also increased. According to our preferred estimates, the VAT policy increased aggregate consumption spending by 34 billion Euros.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: CESifo Working Paper ; No. 9399

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Consumer Economics: Empirical Analysis ; Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy: General (includes Measurement and Data) ; Macroeconomics: Consumption; Saving; Wealth ; Fiscal Policy ; Studies of Particular Policy Episodes ; Fiscal Policies and Behavior of Economic Agents: Household
• Thema: unconventional fiscal policy ; value added tax ; survey data ; expectations ; consumption ; household data

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Bachmann, Ruediger ; Born, Benjamin ; Goldfayn-Frank, Olga ; Kocharkov, Georgi ; Luetticke, Ralph ; Weber, Michael ; Weber, Michael
• Ereignis: Veröffentlichung
• (wer): Center for Economic Studies and ifo Institute (CESifo)
• (wo): Munich
• (wann): 2021

Weitere Informationen

• Handle: http://hdl.handle.net/10419/248944
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ