SHOULD WE CARE ABOUT THE COMPOSITION OF TAX-BASED STIMULUS PACKAGES?

Author First name, Last name, Institution

K. Peren Arin
Peter Harald Helles
Murat Koyuncu
Otto F. M. Reich

Document Type

Article

Source of Publication

Contemporary Economic Policy

Publication Date

7-1-2016

Abstract

© 2015 Western Economic Association International We investigate the effects of tax policy shocks on the U.S. economy over the 1972:3–2008:4 period within a structural vector autoregressive (SVAR) framework. Disaggregating tax shocks suggests that the positive output multipliers documented for total taxes by the previous literature are present only for indirect tax innovations. We also show that both labor and corporate taxes have similar effects on output, with labor tax multipliers being slightly larger in magnitude. The positive and negative responses of inflation following respectively corporate and labor tax shocks imply that former shocks work through aggregate supply, whereas the latter work predominantly through aggregate demand. (JEL C32, E62, H20).

DOI Link

10.1111/coep.12131

ISSN

1074-3529

Publisher

Blackwell Publishing Inc.

Volume

34

Issue

3

First Page

430

Last Page

445

Disciplines

Business

Scopus ID

84951730109

Recommended Citation

Peren Arin, K.; Helles, Peter Harald; Koyuncu, Murat; and Reich, Otto F. M., "SHOULD WE CARE ABOUT THE COMPOSITION OF TAX-BASED STIMULUS PACKAGES?" (2016). All Works. 3087.
https://zuscholars.zu.ac.ae/works/3087

Indexed in Scopus

yes

Open Access

no