Revisiting the narrative approach of estimating tax multipliers Shafik Hebous, Tom Zimmermann
By: Hebous, Shafik
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Contributor(s): Zimmermann, Tom.
Material type: 
ArticlePublisher: 2018Subject(s): POLITICA FISCAL | EFECTO MULTIPLICADOR | REINO UNIDO | ESTADOS UNIDOSOnline resources: Click here to access online
In:
The Scandinavian Journal of Economics v. 120, n. 2, 2018, p. 428-439Summary: We analyze whether popular measures of narrative tax shocks can be treated as relevant instruments for observable endogenous tax series of interest. We find that narrative
tax measures are only weakly correlated with cyclically adjusted tax revenues for the US and the UK. Using weak-instrument robust inference, narrative tax measures often yield insignificant estimates of tax multipliers. We conclude that the literature currently understates the uncertainty associated with estimating the tax multiplier using the narrative approach.
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| Artículos | IEF | IEF | OP 1376/2018/2-2 (Browse shelf) | Available | OP 1376/2018/2-2 |
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| OP 1376/2018/120/1 The Scandinavian Journal of Economics | OP 1376/2018/2 The Scandinavian Journal of Economics | OP 1376/2018/2-1 Corporate taxation and productivity catch-up | OP 1376/2018/2-2 Revisiting the narrative approach of estimating tax multipliers | OP 1376/2018/3 The Scandinavian Journal of Economics | OP 1376/2018/3-1 Elasticity of taxable income | OP 1376/2018/4 The Scandinavian Journal of Economics |
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Resumen.
Bibliografía.
We analyze whether popular measures of narrative tax shocks can be treated as relevant instruments for observable endogenous tax series of interest. We find that narrative
tax measures are only weakly correlated with cyclically adjusted tax revenues for the US and the UK. Using weak-instrument robust inference, narrative tax measures often yield insignificant estimates of tax multipliers. We conclude that the literature currently understates the uncertainty associated with estimating the tax multiplier using the narrative approach.
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