show that a profit tax and a transaction tax have opposite implications for equilibrium outcome in bargaining. A marginal … increase of a transaction tax increases the incentive to produce private information which creates adverse selection and … reduces the probability of trade. In contrast, a marginal increase of a profit tax reduces the incentive to produce …

We study whether output responds symmetrically to tax increases and decreases in postwar US data, using the … identification strategy in Romer and Romer (2010). We find evidence of important asymmetries: the output response to a tax increase … is statistically insignificant, but output shows a significantly positive and permanent increase following a tax decrease …