Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311938 
Year of Publication: 
2024
Series/Report no.: 
IZA Discussion Papers No. 17499
Publisher: 
Institute of Labor Economics (IZA), Bonn
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.
Subjects: 
tax policy
anticipation effects
fiscal policy
JEL: 
H20
H30
E32
E62
Document Type: 
Working Paper

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