Arbeitspapier
Legislative tax announcements and GDP: Evidence from the United States, Germany, and the United Kingdom
We study the announcement effect of legislated tax changes on GDP in the US, Germany, and the UK. Using, as the shock of interest, narratively identified information (Romer & Romer, 2009) about future tax changes at the quarter of their introduction to the legislative body, we analyse the dynamic results of Local Projections (Jordà, 2005). We find hetero-geneous effects across the three countries: economic activity declines (increases) in the US (the UK), but remains unaffected in Germany. When allowing the responses to vary over the business cycle, we find evidence that US GDP drops regardless of the business cycle, whereas UK GDP rises only during non-recessionary times. We find significant effects for German GDP too: it rises (drops) during recessionary (non-recessionary) times. In general, consumption, investment, and employment follow in the path of GDP.
- Sprache
-
Englisch
- Erschienen in
-
Series: MAGKS Joint Discussion Paper Series in Economics ; No. 34-2021
- Klassifikation
-
Wirtschaft
Fiscal Policy
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
Taxation, Subsidies, and Revenue: General
Fiscal Policies and Behavior of Economic Agents: General
Tax Law
- Thema
-
Fiscal policy
tax policy
legislated tax changes
announcement effect
state dependence
United States
Germany
United Kingdom
Local Projections
narrative approach
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Hayo, Bernd
Mierzwa, Sascha
- Ereignis
-
Veröffentlichung
- (wer)
-
Philipps-University Marburg, School of Business and Economics
- (wo)
-
Marburg
- (wann)
-
2021
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Hayo, Bernd
- Mierzwa, Sascha
- Philipps-University Marburg, School of Business and Economics
Entstanden
- 2021
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