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dc.contributor.authorMERTENS, Karel
dc.contributor.authorRAVN, Morten O.
dc.date.accessioned2008-01-23T10:48:09Z
dc.date.available2008-01-23T10:48:09Z
dc.date.issued2008
dc.identifier.issn1725-6704
dc.identifier.urihttp://hdl.handle.net/1814/7862
dc.description.abstractWe provide empirical evidence on the effects of tax liability changes in the United States. We make a distinction between “surprise” and “anticipated” tax shocks. Surprise tax cuts give rise to a large boom in the economy. Anticipated tax liability tax cuts are instead associated with a contraction in output, investment and hours worked prior to their implementation. After their implementation, anticipated tax liability cuts lead to an economic expansion. We build a DSGE model with changes in tax rates that may be anticipated or not, estimate key parameters using a simulation estimator and show that it can account for the main features of the data. We argue that tax shocks are empirically important for U.S. business cycles and that the Reagan tax cut, which was largely anticipated, was a main factor behind the early 1980’s recession.en
dc.format.mimetypeapplication/pdf
dc.language.isoenen
dc.publisherEuropean University Institute
dc.relation.ispartofseriesEUI ECOen
dc.relation.ispartofseries2008/05en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.subjectFiscal policyen
dc.subjecttax liabilitiesen
dc.subjectanticipation effectsen
dc.subjectstructural estimationen
dc.subjectE20en
dc.subjectE32en
dc.subjectE62en
dc.subjectH30en
dc.titleThe Aggregate Effects of Anticipated and Unanticipated U.S. Tax Policy Shocks: Theory and Empirical Evidenceen
dc.typeWorking Paperen
dc.neeo.contributorMERTENS|Karel|aut|
dc.neeo.contributorRAVN|Morten O.|aut|
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