This paper studies how investment tax incentives stimulate output in an estimated medium-scale dynamic stochastic … general equilibrium model. We find that the horizon following a positive shock to investment tax incentives is crucial. The …

This paper studies how investment tax incentives stimulate output in a medium-scale DSGE model, which allows for a … variety of fiscal financing mechanisms. We find that the horizon following a positive shock in investment tax incentives is … analysis also contributes to the time-to-build profile of the fiscal multiplier. The results suggest that investment tax …