Macroeconomic effects of the anticipation and implementation of tax changes in Germany: Evidence from a narrative account

Désirée Christofzik, Angela Fuest and Robin Jessen

No 852, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: This paper quantifies the dynamic macroeconomic effects of tax changes in Germany, allowing for anticipation effects of preannounced tax reforms. Identification is achieved using a narrative approach which provides information about the timing of tax reforms. For an anticipated tax shock, we find an implied peak tax multiplier after implementation of 1.7. However, this positive effect is accompanied by significantly negative anticipation effects, in particular for output, investment, and hours worked. A substantial positive impact is observed only several quarters after implementation. Our results suggest that tax policy may thus be able to exploit anticipation effects by strategically announcing policy measures.

Keywords: fiscal policy; tax policy; anticipation effects (search for similar items in EconPapers)
JEL-codes: E32 E62 H20 H30 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Macroeconomic Effects of the Anticipation and Implementation of Tax Changes in Germany: Evidence from a Narrative Account (2024)
Journal Article: Macroeconomic Effects of the Anticipation and Implementation of Tax Changes in Germany: Evidence from a Narrative Account (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:852

DOI: 10.4419/86788988

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