This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Journal: Economic Policy: Vol. 4 No. 2 (May 2012)

AEJ: Policy Volume. 4, Issue 2 | leftPrevious ArticleNext Articleright

Expand

Quick Tools:

Print Article Summary Email Link to this Article Export Citation
Sign up for Email Alerts Follow us on Twitter Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Policy - All Issues

AEJ: Policy Forthcoming Articles

Empirical Evidence on the Aggregate Effects of Anticipated and Unanticipated US Tax Policy Shocks

Article Citation

Mertens, Karel, and Morten O. Ravn. 2012. "Empirical Evidence on the Aggregate Effects of Anticipated and Unanticipated US Tax Policy Shocks." American Economic Journal: Economic Policy, 4(2): 145-81.

DOI: 10.1257/pol.4.2.145

Abstract

We provide evidence on the dynamic effects of tax liability changes in the United States. We distinguish between surprise and anticipated tax changes. Preannounced but not yet implemented tax cuts give rise to contractions in output, investment, and hours worked while real wages increase. There are no significant anticipation effects on aggregate consumption. Implemented tax cuts, regardless of their timing, have expansionary effects, on output, consumption, investment, hours worked, and real wages. Results are shown to be robust. Tax shocks are important impulses to the US business cycle and anticipation effects have been important during several business cycle episodes. (JEL E23, E32, E62, H20, H30)

Article Full-Text Access

Full-text Article

Additional Materials

Download Data Set (441.52 KB)

Authors

Mertens, Karel (Cornell U)
Ravn, Morten O. (U College London)

JEL Classifications

E23: Macroeconomics: Production
E32: Business Fluctuations; Cycles
E62: Fiscal Policy
H20: Taxation, Subsidies, and Revenue: General
H30: Fiscal Policies and Behavior of Economic Agents: General

Comments

View Comments on This Article (0) | Login to post a comment


American Economic Journal: Economic Policy



AEA Member Login:


Quick Tools:

Email Link to this Issue

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AEJ: Policy - All Issues

AEJ: Policy - Forthcoming Articles

AEA Journals

Virtual Field Journals

AEAweb | AEA Journals | Contact Us