Macroeconomic Effects of the Anticipation and Implementation of Tax Changes in Germany: Evidence from a Narrative Account

Désirée Christofzik, Angela Fuest () and Robin Jessen ()
Additional contact information
Angela Fuest: RWI
Robin Jessen: RWI

No 17499, IZA Discussion Papers from Institute of Labor Economics (IZA)

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. An anticipated cut in taxes has a positive effect on output with a peak multiplier of 1.7, observed not until nine quarters after implementation. This positive effect is accompanied by significant negative anticipation effects on output, consumption, investment, hours worked, and wages. Our results suggest that policy makers should take anticipation effects into account when implementing fiscal policy measures.

Keywords: tax policy; anticipation effects; fiscal policy (search for similar items in EconPapers)
JEL-codes: E32 E62 H20 H30 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2024-12
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published - published in: Economica, 2022, 89 (353), 62-81.

Downloads: (external link)
https://docs.iza.org/dp17499.pdf (application/pdf)

Related works:
Journal Article: Macroeconomic Effects of the Anticipation and Implementation of Tax Changes in Germany: Evidence from a Narrative Account (2022)
Working Paper: Macroeconomic effects of the anticipation and implementation of tax changes in Germany: Evidence from a narrative account (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp17499

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().