Top-down vs.Bottom-up? Reconciling the effects of tax and transfer shocks on output

Sebastian Gechert, Christoph Paetz () and Paloma Villanueva ()
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Paloma Villanueva: Banco de España

No 1712, Working Papers from Banco de España

Abstract: Using the bottom-up approach of Romer and Romer (2010), we construct a narrative dataset of net-revenue shocks for Germany by extending the tax shock series of Hayo and Uhl (2014) and coding a shock series for social security contributions, benefits and transfers. We estimate the multiplier effects of shocks to net revenues, taxes, social security contributions, benefits and transfers in a proxy SVAR framework [Mertens and Ravn (2013)] and compare them with the top-down identification [Blanchard and Perotti (2002)]. We find multiplier effects of net-revenue components between 0 and 1 for both approaches. These estimates are comparably low and we investigate the differences.

Keywords: fiscal shock identification; fiscal multipliers; revenue elasticities (search for similar items in EconPapers)
JEL-codes: E62 H20 H30 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2017-03
New Economics Papers: this item is included in nep-mac and nep-pbe
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Top-Down vs. Bottom-Up? Reconciling the Effects of Tax and Transfer Shocks on Output (2017)
Working Paper: Top-Down vs. Bottom-Up? Reconcilling the Effects of Tax and Transfer Shocks on Output (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:1712

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