The full, persistent, and symmetric pass-through of a temporary VAT cut

• 成果类型: Article
• 署名作者: Bernardino, Tiago; Gabriel, Ricardo Duque; Quelhas, Joao; Silva-Pereira, Marcia
• 署名单位: Stockholm University; Federal Reserve System - USA; Federal Reserve System Board of Governors; Stockholm University; Banco de Portugal
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2025.105416
• 发表日期: 2025
• 关键词: Value-added tax; pass-through; Microdata; public policy; inflation

摘要

We investigate the pass-through of a temporary value-added tax (VAT) cut on selected food products to consumer prices in Portugal. Exploiting a novel data set of daily online prices, we find that the VAT cut was fully transmitted to consumer prices, persisted throughout the policy duration, and prices returned to the pre-implementation trend after reversal. We discuss two potential mechanisms driving this result: the policy's salience to consumers in a high-inflation environment and the decline in producer prices when implemented. We estimate that the policy reduced the inflation rate by 0.68 percentage points on impact.