Empirical evidence on the aggregate effects of anticipated and unanticipated U.S. tax policy shocks
By: Karel Mertens, Morten Ravn
Contributors: Ravn, Morten O.; National Bureau of Economic Research
Series: NBER working paper series -- working paper 16289; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 16289.
Publisher: National Bureau of Economic Research
Published: 2010
Place of publication: Cambridge, MA
Language: eng
Format: Electronic resource
Description: "We provide empirical evidence on the dynamics effects of tax liability changes in the United States.  We distinguish between surprise and anticipated tax changes using a timing-convention.  We document that pre-announced but not yet implemented tax cuts give rise to contractions in output, investment and hours worked while real wages increase.  In contrast, there are no significant anticipation effects on aggregate consumption.  Implemented tax cuts, regardless of their timing, have expansionary and persistent effects on output, consumption, investment, hours worked and real wages.  Results are shown to be very robust.  We argue that tax shocks are empirically important impulses to the U.S.  business cycle and that anticipation effects have been important during several business cycle episodes"--National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 9/28/2010.

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