Tax news in good and bad times

Sandeep Kumar Rangaraju; Ana María Herrera

doi:10.1016/j.econlet.2021.110031

Tax news in good and bad times

Sandeep Kumar Rangaraju, Ana María Herrera

Economics

Research output: Contribution to journal › Article › peer-review

4 Scopus citations

Abstract

We investigate whether the effect of tax news depends on the state of the economy. Using U.S. quarterly data, we show that news about future tax cuts are more contractionary during recessions. This nonlinearity is mainly due to the response of durable consumption and, especially, nonresidential investment.

Original language	English
Article number	110031
Journal	Economics Letters
Volume	207
DOIs	https://doi.org/10.1016/j.econlet.2021.110031
State	Published - Oct 2021

Bibliographical note

Publisher Copyright:
© 2021 Elsevier B.V.

Keywords

Anticipated tax shocks
Fiscal policy
Policy foresight

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.econlet.2021.110031

Cite this

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title = "Tax news in good and bad times",

abstract = "We investigate whether the effect of tax news depends on the state of the economy. Using U.S. quarterly data, we show that news about future tax cuts are more contractionary during recessions. This nonlinearity is mainly due to the response of durable consumption and, especially, nonresidential investment.",

keywords = "Anticipated tax shocks, Fiscal policy, Policy foresight",

author = "Rangaraju, {Sandeep Kumar} and Herrera, {Ana Mar{\'i}a}",

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year = "2021",

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N2 - We investigate whether the effect of tax news depends on the state of the economy. Using U.S. quarterly data, we show that news about future tax cuts are more contractionary during recessions. This nonlinearity is mainly due to the response of durable consumption and, especially, nonresidential investment.

AB - We investigate whether the effect of tax news depends on the state of the economy. Using U.S. quarterly data, we show that news about future tax cuts are more contractionary during recessions. This nonlinearity is mainly due to the response of durable consumption and, especially, nonresidential investment.

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KW - Fiscal policy

KW - Policy foresight

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VL - 207

JO - Economics Letters

JF - Economics Letters

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Tax news in good and bad times

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

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