The Effects of Countercyclical Fiscal Policy: Firm Level Evidence from Temporary Consumption Tax Cuts in Turkey
ثبت نشده
چکیده
The paper investigates the effects of temporary consumption tax cuts using firm‐level data. As part of its countercyclical measures implemented during the recent global economic crisis, Tur‐ key temporarily lowered consumption taxes on selected durables. Our empirical strategy ex‐ ploits variation in firm exposure to the tax cut which allows us to control for unobserved indus‐ try‐ and region‐specific shocks to address potential endogeneity. Using data on the change of sales of firms that benefited from this measure and of those that did not over different periods, we find positive and robust effects of consumption tax cuts on the change of firm sales which is consistent with theoretical predictions. JEL codes: H20, E62
منابع مشابه
The Impact of Fiscal Policy on Macroeconomic Variables: New Evidence from a DSGE Model
The purpose of this article is to analyze the macroeconomic impacts of fiscal policy in Iran using a new-Keynesian Dynamic Stochastic General Equilibrium (DSGE) model. The model takes into account distortionary taxations on wage, dividend, and consumption, while government expenditures are broken down into consumption of goods and services, and investment. The model is calibrated for Iran based...
متن کاملFiscal Policy and the Distribution of Consumption Risk
Recent fiscal interventions have raised concerns about US public debt, future fiscal pressure, and long-run economic growth. This paper studies fiscal policy design in an economy in which: (i) the household has recursive preferences and is averse to both shortand long-run uncertainty, and (ii) growth is endogenously sustained through innovations whose market value is sensitive to the tax system...
متن کاملThe Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks
This paper investigates the impact of changes in the level of taxation on economic activity. The paper uses the narrative record presidential speeches, executive-branch documents, and Congressional reports to identify the size, timing, and principal motivation for all major postwar tax policy actions. This narrative analysis allows us to separate revenue changes resulting from legislation f...
متن کاملFiscal Policy, Consumption Risk, and Stock Returns: Evidence from US States∗
We find that the consumption risk of investors is lower in states that implement countercyclical fiscal policies. Moreover, firms whose investor base are concentrated in counter-cyclical states have lower stock returns, along with firms that relocate their headquarters to a countercyclical state. Therefore, counter-cyclical fiscal policies lower the consumption risk of investors and consequentl...
متن کاملThe Transitory VAT Cut in the UK: A Dynamic General Equilibrium Analysis
This paper studies the macroeconomic effects of the transitory Value Added Tax (VAT) cut in the UK using a dynamic general equilibrium approach. The temporary VAT cut policy was announced on 24 November 2008, and was due to come into effect on 1 December 2008, with VAT reverting to its previous level as from 1 January 2010. We quantify the effects of that temporary fiscal stimulus policy on the...
متن کامل