Government fiscal aggregates are often manipulated over the course of the business cycle in order to provide counter-cyclical stimulus. Changes that are not discretionary--the so-called "built-in stabilizers"--also significantly vary over the business cycle, in a manner that is even more...

Recent research on business investment decisions suggests that real investment in plant and equipment is quite sensitive to changes in the user cost of capital, pointing to the possibility that long-run changes in tax policy may have a significant impact on an economy's capital stock. Indeed,...