Fiscal stimulus and distortionary taxation

  • 2.79 MB
  • 878 Downloads
  • English
by
National Bureau of Economic Research , Cambridge, MA
StatementThorsten Drautzburg, Harald Uhlig
SeriesNBER working paper series -- working paper 17111, Working paper series (National Bureau of Economic Research : Online) -- working paper no. 17111.
ContributionsUhlig, Harald, 1922-, National Bureau of Economic Research
Classifications
LC ClassificationsHB1
The Physical Object
FormatElectronic resource
ID Numbers
Open LibraryOL25021669M
LC Control Number2011657312

Changing the composition from a consumption-only stimulus to the empirical ARRA stimulus lowers the median multiplier by to Introducing distortionary taxes and the empirical ARRA timing lowers the multiplier further, by about each, closing the remaining gap to our baseline estimate of Cited by: Outline 1 Fiscal Stimulus and its Aftermath 2 Fiscal Stimulus: The Keynesian Textbook 3 An NK model with distort.

taxes and gov. capital. Estimation and Historical Shocks Explaining the financial crisis 4 Results Benchmark Sensitivity analysis 5 The power of monetary policy.

6 Challenges 7 Conclusion Harald Uhlig (University of Chicago) Fiscal Stimulus and Distortionary Taxation. Fiscal Stimulus and Distortionary Taxation We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of We extend the benchmark medium-scale New Keynesian model, allowing for credit-constrained households, the zero lower bound, government capital, and distortionary taxation.

Downloadable. We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of We extend the benchmark Smets-Wouters () New Keynesian model, allowing for credit-constrained households, the zero lower bound, government capital, and distortionary taxation.

Download Fiscal stimulus and distortionary taxation FB2

The posterior yields modestly positive short-run. Fiscal Stimulus and Distortionary Taxation∗ Thorsten Drautzburg and Harald Uhlig† University of Chicago. First draft: January 2nd, This revision: ∗This research has been supported by the NSF grant SES †Address: Thorsten Drautzburg and Harald Uhlig, Department of Economics.

Fiscal Stimulus, Distortionary Taxation, and Financial Frictions Radu Puslenghea Novem Abstract I quantify scal multipliers in a New Keynesian model with credit constrained households, housing, and distortionary taxation.

My ndings suggest that increases in government spending have a larger economic stimulus e ect compared to tax in. Fiscal Stimulus and Distortionary Taxation. Thorsten Drautzburg and Harald Uhlig () Review of Economic Dynamics,vol.

18, issue 4, Abstract: We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of We extend the benchmark medium-scale New Keynesian model, allowing for credit Cited by: The fiscal policy specification posits that government spending, lump-sum transfers, and distortionary taxation on labor income, capital income.

Fiscal Stimulus and Distortionary Taxation. 1 The combination of higher expenditure as part of fiscal stimulus and lower tax revenues arising from low or. We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act of We extend the benchmark Smets-Wouters New Keynesian model (Smets and Wouters, ), allowing for credit-constrained households, the zero lower bound, government capital, and distortionary taxation.

NBER Program(s):Economic Fluctuations and Growth Program We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of We extend the benchmark Smets-Wouters () New Keynesian model, allowing for credit-constrained households, the zero lower bound, government capital and distortionary by: Fiscal Stimulus and Distortionary Taxation Harald Uhlig1 Thorsten Drautzburg2 1University of Chicago Department of Economics [email protected] [email protected] January 8, Harald Uhlig (University of Chicago) Fiscal Stimulus and Distortionary Taxation January 8, Cited by: Fiscal Stimulus and Distortionary Taxation Thorsten Drautzburg and Harald Uhlig NBER Working Paper No.

June JEL No. E62,E63,E65,H20,H62 ABSTRACT We quantify the fiscal multipliers in response to the American Recovery and Cited by:   Fiscal Stimulus and Distortionary Taxation. ZEW - Centre for European Economic Research Discussion Paper No. Number of pages: 44 Posted: 16 Jun Downloads Fiscal Stimulus and Distortionary Taxation.

NBER Working Paper No. w Number of pages: 42 Posted: 12 Jun Cited by:   We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of We extend the benchmark Smets-Wouters () New Keynesian model, allowing for credit-constrained households, the zero lower bound, government capital and distortionary taxation.

plier: If the stimulus is successful, the economy leaves the binding ZLB earlier and the effect of additional spending is reduced. We address this issue by endogenizing the duration of the ZLB in robustness tests. A key difference is their focus on the short-run when the effects of adjusting distortionary taxes instead of transfers matter less.

The film was inspired by the book he co-authored, Money: How the Destruction of the Dollar Threatens the Global Economy – and What We Can Do About It.

Steve’s latest book is Reviving America. A distortionary tax creates market inefficiencies. The tax makes products cost more than they would normally cost but don't improve the quality of the product.

This distorts the supply and demand balance, creating a deadweight loss. Fewer buyers will be willing to pay the market price for the product, plus the tax. Fiscal policy and saving under distortionary taxation Momi Dahan!, Zvi Hercowitz",*!Bank of Israel, Jerusalem, Israel "The Eitan Berglas School of Economics, Tel AvivUniversity, Tel AvivIsrael and Bank of Israel, Jerusalem, Israel Received 14 August ; received in revised form 9 July ; accepted 4 September Abstract.

Code and data files for "Fiscal Stimulus and Distortionary Taxation" Thorsten Drautzburg and Harald Uhlig () Computer Codes from Review of Economic Dynamics.

Abstract: Code and data to replicate the results of the article. Language: Matlab Date: References: Add references at CitEc Citations: Track citations by RSS feed. Downloads Author: Thorsten Drautzburg, Harald Uhlig. Abstract. We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of We extend the benchmark Smets-Wouters (Smets and Wouters, ) New Keynesian model, allowing for credit-constrained households, the zero lower bound, government capital and distortionary by: Get this from a library.

Fiscal stimulus and distortionary taxation. [Thorsten Drautzburg; Harald Uhlig; National Bureau of Economic Research.] -- We quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of We extend the benchmark Smets-Wouters () New Keynesian model, allowing for.

Financing fiscal stimulus.

Details Fiscal stimulus and distortionary taxation PDF

The debt crises in the Eurozone and the US are reminders that all government expenditures must eventually be financed by tax revenues. This column analyses the effect of the US fiscal stimulus programme and argues that abstracting from financing decisions presents a skewed version of the net benefits to society.

In response to the recession, the U.S. Congress passed several fiscal stimulus bills, including the $ billion American Recovery and Reinvestment Act (ARRA) of 1 In addition to its large scale, the ARRA differs from those in the recent past by relying more on spending increases and less on tax cuts.

Nearly two thirds of the stimulus Cited by:   Apart from the reasons for combining fiscal policy (FP) and monetary policy (MP) given here, I’ve just thought of another reason: each of the policies on its own is distortionary.

A fiscal policy (FP) measure typically consists of government increasing spending by £X and covering that with £X of additional : Ralph Musgrave. Fiscal policy is not distortionary.

Description Fiscal stimulus and distortionary taxation PDF

a form of government spending) CAN BE distortionary. It doesn’t take a genius to think a distortionary form of taxation: e.g. a tax on people with red hair, to take a silly example.

And here again, fiscal stimulus does not need to be distortionary. For example the same percentage increase on ALL Author: Ralph Musgrave. Fiscal Stimulus and Distortionary Taxation by Thorsten Drautzburg and Harald Uhlig The authors quantify the fiscal multipliers in response to the American Recovery and Reinvestment Act (ARRA) of the role of distortionary taxation for the effectiveness of fiscal stimuli.

He shows that an increase in government consumption which is financed not only by debt but partly by distortionary labor taxes leads to a short-run boom in output but comes at the cost of an output reduction later on.

Faia, Lechthaler, and Merkl () and Campolmi. The Correlation between Fiscal Policy and Economic Growth The impact of budgetary revenues and expenses on economic growth Table 7 In conclusion, even if all budgetary expenses are productive, financing them by distortionary fiscal revenues could have a.

Fiscal Stimulus and Distortionary Taxation. By Thorsten Drautzburg and Harald UhligThorsten Drautzburg and Harald UhligThorsten Drautzburg and Harald Uhlig.

Abstract. This research has been supported by the NSF grant SES We are grateful to the useful feedback from a number of seminar and conference audiences. The views expressed.

D. Sensitivity to Investment Adjustment Costs and the Elasticity of Substitution Between Leisure and ConsumptionE. Debt-Financed Fiscal Policy and Distortionary Taxation; F. Sensitivity to Tax Persistence and the Tax Responsiveness to Government Debt; Table B.2 The Impact of the Fiscal Stimulus in Different Scenarios; C.“Fiscal Stimulus and Distortionary Taxation.” Working PaperFederal Reserve Bank of Philadelphia, November 2 More information about their analysis can be found in Dupor, William; and McCrory, Peter.

“A Cup Runneth Over: Fiscal Policy Spillovers from the Recovery Act.” Working Paper C, Federal Reserve Bank of St. Economic theory suggests that a fiscal expansion financed by distortionary taxation could potentially generate substantial adverse growth effects after the initial positive demand stimulus dies down.

It is then estimated that the negative economic impact from the German stimulus may explain up to one third of the subsequent growth gap between.