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Using the post-WWII data of U.S. federal corporate income tax changes, within a Smooth Transition VAR, this paper finds that the output effect of capital income tax cuts is government debt-dependent: it is less expansionary when debt is high than when it is low. To explore the mechanisms that...
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find sizeable effects of VAT measures on consumption (esp. durables) with a multiplier larger than one on GDP and can match …
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-term multiplier of one, which reduces over the medium term. Thus, the temporary VAT reduction is an effective instrument in the short …
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multiplier is relatively small and the tax multiplier relatively large. After four years, the government spending multiplier is 0 ….6 and the tax multiplier -2.62. This conclusion is found to be robust across different model specifications. I also find …
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tax multiplier estimates that are indistinguishable from zero. We conclude that the literature currently understates the … uncertainty associated with quantifying the tax multiplier. …
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