Quantifying tax effects under policy foresight

• 成果类型: Article
• 署名作者: Yang, SCS
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2004.09.003
• 发表日期: 2005
• 页码: 1557-1568
• 关键词: tax policy; fiscal policy; policy foresight; time-series models

摘要

Studies of tax effects make the conventional information assumption that changes in period-t taxes become known at t. Legislative lags, however, imply that news arrives before tax changes take place. Under policy foreknowledge, the conventional information structure is therefore misspecified. Simulations of a standard neoclassical growth model suggest that foresight of only one quarter can distort substantially the estimates of tax effects obtained under the no-foresight assumption. Also, it is crucial to model capital and labor taxes separately: anticipated changes in these two tax policies have opposite effects on consumption, investment, labor, and output before policy realization. (c) 2005 Elsevier B.V. All rights reserved.